State revenue from corporate holdings totals EUR 1.45 billion – ownership steering preparing funding for Government's investment programme

State revenue from corporate holdings totals EUR 1.45 billion - ownership steering preparing funding for Government's investment programme

The value of state holdings stood at around EUR 30 billion at the end of 2024. The State earned a total of EUR 1.45 billion in revenue from its corporate holdings. The goal is to use EUR three billion in state revenue from corporate holdings to finance the Government's investment programme over the current government term.

In 2024, the State received a total of EUR 1.45 billion in dividends and share sale proceeds from its corporate holdings, compared with EUR 1.57 billion in 2023. The share of revenue earned by the Prime Minister's Office was EUR 1.33 (1.36) billion. The dividend yield was positively influenced by Fortum's higher dividend level and the increased distribution of assets by non-listed commercial companies.

At the end of 2024, the total value of all state holdings was around EUR 30 (37) billion. The most significant single reason for the change in value was the decrease in Neste's share price and the large weight of the company in the State's portfolio.

The market value of all state-owned listed companies was EUR 17.8 (24.9) billion. Of this, the State's direct holdings in listed companies accounted for EUR 10.8 (17.9) billion. The value of Solidium's holdings amounted to EUR 6.9 (7.1) billion. The total value of non-listed corporate holdings according to the ownership steering valuation at the end of the year was approximately EUR 12.1 (11.6) billion.

"Over the past year, state-owned companies faced challenging operating conditions characterised by ongoing economic uncertainty and geopolitical tensions. Despite these challenges, many companies managed to improve their competitiveness and profitability," said Maija Strandberg, Director General of the Ownership Steering Department at the Prime Minister's Office.

At the end of 2024, the State had corporate holdings in 69 companies, of which 34 were commercial companies and 35 were special assignment companies. State-owned companies employed 280,000 (285,000) employees in total.

Financing the Government's investment programme and boosting growth

Ownership steering has advanced the objectives of the Government Programme, for example by drawing up a plan to finance the Government's investment programme through revenue from corporate holdings. The plan involves using annual dividend income exceeding the baseline, dismantling the overcapitalisation and excess liquidity of companies, possible company restructurings and the sale of shares in listed companies.

The goal is to use EUR three billion in state revenue from corporate holdings to finance the investment programme during the government term. For this purpose, ownership steering has analysed and identified instances of overcapitalisation of unlisted state-owned companies. Funding made available for the investment programme totalled EUR 352 million in 2024.

"It is in the State's interest to make the balance sheets of state-owned companies more efficient and to steer them towards the efficient use of capital without compromising special assignments or growth opportunities. If the Government's investment programme is mainly financed by selling listed companies that produce good dividend flows, this will increase the need for central government borrowing down the line. There is little domestic capital available to replace state ownership when companies are sold, meaning that ownership easily moves abroad," said Maija Strandberg.

The State's priorities for state-owned companies are profitable growth, an ability and willingness to invest in innovation and product development and a focus on investments, especially in Finland.

"The roles of Finnish Industry Investment Ltd (Tesi) and Solidium as enablers of growth should be seen not as overlapping but as complementary to one another. Solidium and Tesi invest in companies at different stages of the growth curve. Tesi makes venture capital and private equity investments in companies at the growth stage. Solidium, for its part, is an 'anchor owner' that invests in listed companies or companies aimed at listing that have the potential to become nationally important," says Maija Strandberg.

"Solidium is a key tool used by the State to increase and consolidate domestic ownership of listed companies. It is important to ensure that the headquarters and RDI activities of nationally significant companies do not leave Finland and that the Helsinki Stock Exchange remains viable," said Maija Strandberg.

In spring 2024, the Government adopted a new resolution on ownership policy, which emphasises the importance of sustainable growth, risk management and security. The new resolution also includes more concrete objectives for state-owned companies. All state-owned companies are required to set strategic and financial objectives. Special assignment companies must also set objectives related to their special assignments.

Total emissions from corporate holdings on the decline

The State has a sustainability programme which it uses to monitor the achievement of key sustainability objectives. As an owner, the State expects corporate sustainability to be an integral part of companies' strategies and the remuneration of management. At the end of 2024, 83 per cent of state-owned companies had incorporated sustainability objectives into their management incentive schemes.

The State's objective is to reduce the total emissions of its company portfolio. State-owned companies saw a slight decrease in absolute emissions, and their carbon footprint was 52 (54) million tonnes of CO2 equivalent.

"Environmental sustainability work at companies is developing favourably. An increasing number of state-owned companies, 19 per cent, now have science-based emission reduction targets in place, up from 15 per cent last year. Companies are also taking a more targeted approach to preserving biodiversity," says Ministerial Adviser Katariina Sillander, who is responsible for developing sustainability in ownership steering.

Inquiries: Maija Strandberg, Director General, Ownership Steering Department, Prime Minister's Office, tel. +358 50 407 8423; Katariina Sillander, Ministerial Adviser, Prime Minister's Office, tel. +358 50 569 0902, [email protected]