The final balance of the public companies of the last K government: in four years they recorded a net loss of 18 billion dollars

With the data corresponding to the fourth quarter of 2023, recently published by the Treasury Secretariat of the Ministry of Economy, it is now possible to have aa photo and a video of public companies, at least of its main economic and financial indicators. The photo is from last year and the film of the four years of management of the government led by Alberto Fernández, Cristina Kirchner and Sergio Massa. The numbers are shocking. In 2023, the operating deficit of the 33 public non-financial companies recorded a negative balance of 1.6 billion pesos, that at the 2023 average official exchange rate ($295.21) equivalent to 5,440 million dollars.

The 2020-2023 film says that the operational red of public companies has been US$18,035 million, always calculating the operating deficit accumulated each year (in pesos) and converted into dollars using the average exchange rate of each year. The Milei government’s plan is privatize many of these companies.

As already reported Clarion On other occasions, the global operating deficit (the difference that each company records between the revenues it generates and the expenses it incurs exclusively for its business) is mainly explained by the deliberate policy of subsidies for public service tariffs that the Kirchnerist governments applied.

That’s why major operating deficits always appear on top Enarsa (the company that imports energy at market prices and delivers it to the local market at a subsidized price), trains and running water. Added to that trio Argentine airlineswho to stay active used huge public fundsdespite offering fares for its flights similar to those of its private competitors.

A significant fact is that, despite the permanent losses that have been accumulating for several years, companies they have kept their staff more or less stable. As of the last day of 2023, according to the Treasury report, “the staff of consolidated non-financial public companies amounts to 92,058 while as of December 31, 2022 the staff was 93,095 people”

The operating red of public companies is equivalent, every year, to almost a point of GDPAND Its reduction will depend on progress in eliminating subsidies that the current government is applying. In this regard, let’s take a look at the latest data reported by the Congressional Budget Office: Treasury transfers to businesses were $40,893 million in January of this year and $259,741 million in February. This means that in the first two months of the year we observe a real drop in transfers (net of inflation) of 53% compared to the same two months of 2023.

Therefore, the strong increases that are applied and will be applied to natural gas and electricity tariffs should translate into a reduction in Enarsa’s operating deficit, which in 2023 explains 40% of the total operating deficit, with a red of $713,000 million (US$2,416 million).

Another important part of the operating deficit is explained by trains. In 2023 the State will transfer them 335,000 million dollars, 1,135 million dollars, at a rate of 3.1 million dollars per day. From ticket sales they have a turnover of 344,000 million dollars. They had an operating deficit of $362 billion, 22% of the total public companies. Considering the impact of transportation costs on low-income families, this may be the case one of the most difficult operating deficits to reduce. Even in a country with the macroeconomic situation in order, it is difficult to reduce subsidies to rail transport.

Perhaps the adjustment will be due partly to subsidies and partly to staff reductions. As he said Clarionthe Argentine rail system is the country’s largest employer, with a plant of almost 32,000 people. One in three employees of public companies works on trains.

A case worth focusing on is that of Argentine airlines. The outgoing leadership – which responded politically to Camporista leader Mariano Recalde – reported, shortly before the change of government, that the national airline would close 2023 with a profit of 32 million dollars. It was like this?

The Treasury report says this:

• The operating result of the Aerolíneas Argentinas company stands out, which in the fourth quarter of 2023 reached the sum of 608,682.7 million dollars, coming from the sale of tickets for both national and international destinations.

• In 2023 the company received current transfers from the National Treasury in the amount of 40.5 billion dollarswhich represent almost 5% of total current income.
• It is noted, however, that the company presents a financial deficit of 385,115.3 million dollarswhich is financed with an increase in other liabilities.

This financing with other liabilities likely refers to the $100 million Lin ON dollar that the company issued last October. Half of that debt was purchased by the ANSeS fund and the other half by Banco BICE.

Furthermore, the Treasury report states that Aerolíneas had an operating deficit of 231,268 million pesos, equal to 783 million dollars. In four years, Aerolíneas has accumulated an operating deficit of almost 3 billion dollars.

Those that are above the waterline

Of the 33 non-financial public companies, there are a handful that made operating surpluses. What stands out the most is Argentine nuclear power plant (NASA), the company that manages the nuclear power plants and through them generates electricity which it delivers to Cammesa through the national interconnected system.

NASA has been hitting “blue” numbers in recent years. In 2023 it closed with a positive operating profit of almost $350 million.

Going back to the beginning: the deficit of public companies is mainly explained by subsidies. The operating redundancy of these companies was covered with Treasury pesos, obtained largely through the issuance of pesos. Subsidy policy financed by emissions is like a boomerang. Subsidies returned to inflation. And inflation, it has become clear in recent days, generates poverty.