Kosovo Telekom towards bankruptcy, tens of millions of losses within the year

Kosovo Telekom (TK), once the most profitable public enterprise in the country, is heading towards bankruptcy. According to an internal report by the shareholder, the Government of Kosovo, Kosovo Telecom has closed 2016 with a loss of 31m euros, while there has also been a sharp decline in the number of consumers. Kosovo's “Telequem has finished with a negative financial result of about 31.311.000 euros”, says the report “Public Enterprise performance for 2016”, drawn up by the Public Enterprise Policy and Monitoring Unit, under the Ministry of Economic Development (MZHE).
This report, which is expected to go to question Kosovo Assembly deputies, generally outlines serious financial situation in Kosovo Telecom, but also in most public enterprises in the country.

The Government report explains that the large increase in spending in relation to revenues has put Kosovo Telekom in a serious financial state. So of 76m euros in revenue in 2016, expenses amounted to 107.3m euros. As a result, the company contracted wealth and huge increases in obligations.

“As far as overall expenditures are concerned, Kosovo Telecom has scored a 13% increase compared to the previous year, while wage spending has scored a 27% drop compared to the previous year”, the report says.

Kosovo Telecom's assets during 2016 have contracted by 9 percent compared to the previous year, ecuity has contracted, reduced by 29.5 percent, while obligations have increased by 38 percent.

MST: 26.8m euros for salaries

The newspaper “Voice” despite efforts has failed to receive additional clarifications in the Ministry of Economic Development concerning the findings of this report, which was drafted in October last year. Officials of this ministry have not responded to the paper if Arbitrazhi's decision is included in this report PTK with company “Devolli”. Under that decision, Kosovo's Telekom was charged with failing to meet the contract to pay this company 30m euros, but a year later the company withdrew from the decision. Arbitrazhi's decision is mentioned most in terms of challenges and risks for the company, but it is not explained whether these tools are calculated in the category of spending. “in terms of the challenges and risks for KK we can say that 2016 was closed with the International Tributal ruling at Arbitrazhi that the KK paid 26.1m euros in fine 30m euros, including the company's interest “Devolli”, which is the owner of “Z-Mobile” It is also charged with providing 100,000 additional numbers, as well as 3G services and 4G”, the report says.
At the same time, the company's financial position, in the category of expenditures, it is said that 26.8m euros have gone to wages, 22m euros in operational spending, and 23m euros in subcategoria, which has been named “x1>. Another category is mentioned on the board, which ate the company a total of 35.3m euros. This category has been named the other <x2lles”, but it doesn't explain where these tools went either.
The paper has also sent questions to Kosovo Telecom to answer whether this negative trend of the company's performance has continued even in 2017, but has not received an answer in this case.

MST: Fewer consumer numbers

This serious financial situation has reflected even in the contraction of the number of consumers, especially fixed telephones. At the end of 2016, the number of fixed telephone consumers was less than 14 thousand and 187 consumers, or 25 percent lower than the previous year. Meanwhile, mobile phones increased the number of consumers by 12.7 percent compared with 2015. The number of fixed phone consumers at the end of 2016 has resulted in 25% lower than the previous year. The number of mobile consumers for the 2016 period is 12.7% higher than the previous year. The number of Internet services consumers is 12.9% lower than the previous year”, the report said.
The decline is also seen in the number of consumers who use Internet services. By 2015 there were 38 thousand and 149 consumers, while in 2016 it contracted to 33 thousand and 217 consumers, or 4 thousand and 935 fewer consumers.
In general, according to this report the company had failed almost all planned plans this year. “The planned revenues for 2016 are 16% higher than the revenues realised, while the revenues realised in 2016 are for 10% lower than the previous year. Planned expenses are lower by 35% compared to the implementation of 2016. The costs made for 2016 are for 13% higher than the costs made in the preceding year”, the report says.

MST: Experts call for emergency measures

Economy recognisers say that unless urgent measures are taken by the shareholder, in this case the Kosovo Government, Kosovo Telecom (PTK), with the trend of performance, expects bankruptcy. According to Berat Rukiqi, this result in Telekom is the consequence of many years of poor management and which in the last year has affected net loss that has been presented in audited mirrors. The Rukiqi company's situation has cited four main reasons. “The employment and increased operational spending for a decade; being public companies has not had the flexibility to do with the global trend of developments in the telecom sector; the lack of adequate investments for years; the lack of fresh capital from private investment”, Rukiqi has said. He says it has contributed to market loss, delays in technological changes, reduced capital value and loss to a very disturbing value. “What needs to be done: reducing operational spending, reducing wages, increasing productivity, allowing private capital inflows and creating conditions for borrowing for innovative projects”, says Rukiqi, while adding that if the company is not done quickly, there will be problems with “calcas-flone” and liquidity, which can easily go bankrupt.
While Florin Aliu says it is strange this decline of Telekom, when its strategic position in the market is known. Furthermore, if the company continues to have a trend, according to Ali then it must go towards liquidation. But there is also a danger.
There's a risk of reducing the company's value, because if the company continues with losses, then this loss melts company capital. Then it's the risk of the company being sold under its inner value”, Aliu estimates.

Mst: Of 17 public companies, 12 with losses

According to the Government report, the best situation is not even in other public enterprises in the country. Of 17 public companies, 12 have closed 2016 with losses.
After PTK, the hydroeconomic company “is in more serious financial condition. Iber-Lepenc”, Kosovo Post and the company “Train Cos”.
So “Iber-Lepenci” closed 2016 with a loss of 4 million and 395 thousand euros. The company posted 3m of 882 thousand euros, while spending 8m and 277 thousand euros. The report mentions a decline in asset value compared to 2015 for 4.562m euros. “This decline in asset value has resulted from devaluation (amortisation) of assets worth 4.652m euros. As a result of the decline in asset value and large depreciation spending, this company eventually leads to financial loss”, the report said.
The poor situation also turns out to be in the Kosovo Post. The company concluded 2016 with a loss of 1 million and 585 thousand euros. The inflow had 12.2m euros, but spent 13.7m euros.
Meanwhile, the company “Train Cos”, which operates on Kosovo trains and railways, closed this year with a loss of 1m 187 thousand euros, followed by “InfraKos” also has more than 1m euros in losses.
In poor financial condition are the other two companies, the regional water supply company “Radoniqi” and the regional water pipeline company “SouthHeirgion”. Together these two companies closed 2016 with a loss of nearly 1m euros.
The only public enterprise, which can be said to have good performance during 2016, is the Kosovo Energy Corporation (KEK). The company ended the year with a profit of 11m euros. In the meantime, relatively good performance also made possible the regional water pipeline company “Prishtina” with a profit of 846 thousand euros at the end of 2016. Also, the regional company “Hedrodrin” had closed the year with 3 thousand euros in profits. Also with profit year-on-year, the other public irrigation company “WhiteDrini” was closed with 115 thousand euros in profits, as well as the irrigation company “Randojqi” with 16 thousand euros in profits.

FACT:
According to an internal report by the shareholder, the Government of Kosovo, Kosovo Telecom has closed 2016 with a loss of 31m euros, while there has also been a sharp decline in the number of consumers. Kosovo's “Teleclomen in 2016 has completed with negative financial results with about 31.311.000 euros”, says the report “Public Enterprises performance for 2016”, drawn up by the Public Enterprise Policy and Monitoring Unit, under the Ministry of Economic Development (MZHE).

CITIM:
The Government report explains that the large increase in spending in relation to revenues has put Kosovo Telekom in a serious financial state. So of 76m euros in revenue in 2016, expenses amounted to 107.3m euros. As a result, the company contracted wealth and huge increases in obligations. The overall cost of Kosovo Telecom has marked an increase of 13% compared to the previous year, while wage spending has scored a 27% drop compared to the previous year”, the report says.