KCH pays State K80mil

By GYNNIE KERO
THE Kumul Consolidated Holdings (KCH) provided financial assistance totalling more than K300 million to Air Niugini, PNG Power and Telikom and others when the Coronavirus (Covid-19) hit the country, says State Enterprises Minister William Duma.
Yesterday, KCH, the parent company of all State-owned enterprises (SOE), for the first time paid a dividend of K80 million to the Government.
“This is the first dividend from KCH since 2015. From 2019, dividends were deferred to enable KCH to support SOEs heavily affected by the Covid-19 restrictions and more recently, the inflationary pressures from the war in Ukraine,” he said.
Duma said many of the SOEs which were committed to the Government’s restructure and reform programme endorsed in October 2019 were now recording profits and subsequently paying dividends.
For example, the PNG Ports Corporation Ltd has been maintaining its strong performance, leading to a K1.4 billion investment in port redevelopment projects.
He said the State’s communication and motor insurance companies were also paying dividends.
As for Air Niugini, “while it is recovering from unprecedented global pandemic restrictions, it faces volatile fuel costs, aviation supply chain issues and increased cost of capital”.
“The aviation industry will take at least another year to fully adjust to a post-pandemic environment. That said, high yields and reasonable passenger numbers are driving strong profits,” he said.
Duma said the KCH “is mandated to pay annual dividends from the profit earned by assets and investments held in the General Business Trust (GBT)”.
“KCH maintains oversight of the GBT,” he said. “It must ensure that the State-owned assets are properly monetised, SOE business performance is tracked, proposed targets are achieved, and projects executed. SOEs are grappling with stretched balance sheets, rising interest rates and substantial supply chain issues.”
Duma said seven per cent of the KCH dividend would go into the Sovereign Wealth Fund (SWF), with the balance going to Treasury for general budget expenditure.
“All members of the Kumul family have their instructions to contribute to the SWF, per the endorsed dividend policy,” he said.