Total SOE Losses in the first four months of 2022 Outweigh Annual Losses in 2021

Abstract

During the first four months of 2022 the cumulative loss of State-Owned Enterprises (SOEs) amounted to LKR 860 BN. This figure outweighs the annual loss of SOEs in 2021. The top 3 contributors to the increase of the loss were (1) Ceylon Petroleum Corporation (CPC) (2) Sri Lankan Airlines and the (3) Ceylon Electricity Board. The loss was driven by the exchange rate loss due to the depreciation of the currency by 58% in the first four months of 2022. Certain SOE’s with higher level of exposure to foreign debt were more vulnerable to the depreciation of the currency. The CPC was one such SOE that was severely impacted by the exchange rate. The CPC’s losses in the first four months of 2022 amounted to LKR 628 BN which is 73% of the total SOE loss. The foreign exchange loss of the CPC amounted to 550 BN , which is 21 times higher than the same figure of LKR 26 BN reported in the in the same period in 2021.