Publicly owned companies performing well despite millions in losses: DSGAP

The Public Assets Supervision and Administration Bureau (DSGAP) has published a report that grades the performance of publicly owned companies in 2024.

According to the report, publicly owned companies in Macau performed well over the last year, with highlights including Macau International Airport Co. Ltd. (CAM) and Macao Industrial Parks Development Co. Ltd. (SDPIM), both graded A-, indicating a classification of performance between 80% and 84%.

The report from the bureau, led by former Secretary for Administration and Justice Sonia Chan, does not explain which criteria were used to quantify this performance, noting only that the classification is “based on the objective differences between the purposes of incorporation, objectives, nature of the object and type of activity of the assessed companies,” with the grading system to “serve as a reference and basis for the assessment work.”

DSGAP also claims to have “defined the indicators for assessing the operating and operational performance of the assessed companies in 2024, and has conducted the assessment with different guidelines and focuses depending on the type of enterprise.”

The report categorizes publicly owned companies into two groups: Commercial Companies and Social Enterprises.

The first category includes companies such as CAM, SDPIM, and Macau Urban Renewal, S.A., among others. In contrast, the second group comprises companies such as Macao Science Center, Ltd., the Macao Orchestra Company, Ltd., and the public broadcaster TDM, among others.

According to DSGAP, all publicly owned companies performed well, with the companies graded lower (B) being UMTEC Ltd. and the Macao World Trade Center, Ltd. UMTEC is a company owned by the University of Macau, established in 2006.

It is dedicated to promoting and commercializing UM’s research achievements, facilitating research and development collaboration opportunities with industry, and contributing to the development of a knowledge-based economy in Macau and the Greater Bay Area.

According to the latest financial statements, related to the audited accounts for 2024, UMTEC experienced a significant reduction in its profit, decreasing from MOP3.81 million in 2023 to just below MOP782,000 in 2024.

As for the World Trade Center, the company continued to report significant losses in 2024 (MOP 612,000). Still, this was a significantly better performance than in 2023, when losses reached over MOP1.7 million.

The better result obtained in 2024 was not due to the company’s improved performance but primarily to increased government subsidies, which reached MOP11 million in 2024, 57.1% more than the MOP7 million injected in subsidies in 2023.

Graded B+, Macau Urban Renewal Ltd. posted annual revenue of MOP3.7 billion, of which MOP3.69 billion resulted from property sales. The annual profit was MOP1.79 billion, of which MOP1.60 billion was attributable to fair value gains from revaluation of completed investment properties and investment properties under development. Excluding gains from fair value adjustments, the company’s profit in 2024 was MOP193 million.

Also graded B+ is the Macao Orchestra Company, Ltd., despite financial results showing losses of over MOP54 million last year.

Although higher, the 2024 result was not significantly different from previous years, in which the company posted losses of MOP37.5 million (2023) and MOP43.8 million (2022).

Last year alone, the government injected over MOP70 million directly from the Cultural Industry Fund.