THE STATE’S OWNERSHIP REPORT 2004 TABLE OF CONTENTS Welcome to the Norwegian State Ownership Report 2004 3 Telenor ASA 60 A Better State Owner 4 Venturefondet AS 61 The Year 2004 for the State as an Owner 6 Veterinærmedisinsk Oppdragssenter AS 62 Key figures 13 Yara International ASA 63 Returns and assets 14 Companies with other objectives 64 The companies’ financial growth 18 Avinor AS 65 Other matters 22 Bjørnøen AS 66 Organisation of the State’s ownership 26 Gassco AS 67 Good corporate governance in the state’s ownership administration 28 Industritjeneste AS (ITAS) 68 The State’s ownership administration 30 Kings Bay AS 69 Perspectives on the State as a major shareholder in listed companies 32 Norfund 70 Avinor – a company in the service of society 34 Norges Statsbaner AS 71 Presentation of the companies 39 Norsk Eiendomsinformasjon AS 72 Commercial companies 40 Norsk Rikskringkasting AS 73 Argentum Fondsinvesteringer AS 41 Norsk Samfunnsvitenskapelig Datatjeneste AS 74 BaneTele AS 42 Norsk Tipping AS 75 Cermaq ASA 43 Petoro AS 76 DnB NOR ASA 44 Posten Norge AS 77 Eksportfinans ASA 45 Simula Research Laboratory AS 78 Electronic Chart Centre AS 46 SIVA SF 79 Entra Eiendom AS 47 Statnett SF 80 Flytoget AS 48 Statsskog SF 81 Grødegaard AS 49 Uninett AS 82 Kommunalbanken AS 50 AS Vinmonopolet 83 Kongsberg Gruppen ASA 51 Health care enterprises 84 Mesta AS 52 Helse Midt-Norge RHF 85 Nammo AS 53 Helse Nord RHF 86 Norsk Hydro ASA 54 Helse Sør RHF 87 SAS AB 55 Helse Vest RHF 88 Statkraft SF 56 Helse Øst RHF 89 Statoil ASA 57 The State’s overall ownership 90 Statskonsult AS 58 Definitions and special circumstances 92 Store Norske Spitsbergen Kulkompani AS 59 Contact details 94 2 WELCOME TO THE NORWEGIAN STATE OWNERSHIP REPORT 2004 The Norwegian State Ownership Report 2004 includes all • Companies in which the object of ownership is chiefly important business companies in which the State has own- to maximise their commercial value. ership interests. The present ownership report is based on • Companies in which the object of ownership is chiefly the previous Norwegian Ministry of Trade and Industry other than that of maximising their commercial value. ownership reports from 2002 and 2003. The purpose of the State Ownership Report is to provide an overview of A total of 47 companies are included in the Ownership State ownership; to extend knowledge of how the Norwe- Report. For 23 of these, the object of ownership is chiefly gian ministries administrate the state’s ownership, and to to maximise their commercial value. Of these, 7 are listed promote improved public insight and democratic control of on one or more stock exchanges. The value of the State’s how the many assets are administrated. shareholding in the listed companies per 31.03.2005 was NOK 336 billion. The second main category contains 24 The Ownership Report is divided into two main sections. companies. These companies are administrated as an ele- The first of these contains articles concerning the Govern- ment of sectoral policy, but commercial value creation re- ment’s ownership decisions over the previous year and ar- mains important, such as Avinor AS. ticles about how the State exercises its ownership. The sec- ond section contains a description of companies wholly or Information on events concerning the companies and own- part-owned by the State; a page is devoted to each business ership decisions was last updated on 31 March 2005. and the associated key figures. The companies are sorted into two main categories depending on the principal object of the ownership: KEY FIGURES FOR THE COMPANIES IN THE STATE’S OWNERSHIP REPORT 2004 Companies with NOK millions Listed Unlisted other objectives Total State’s shareholding - value 1) 302 206 48 113 n/a 350 318 Weighted return last year 2) 33 % Profit 3) 51 524 5 624 628 57 776 Weighted return on equity 4) 20 % 12 % 1 % 19 % Dividend 5) 13 267 3874 1099 18 240 Sales proceeds 19 389 0 113 19 502 Capital injections, share acquisitions (1 861) (121) (575) (2 556) 1) For listed companies are the values based on market price and the state’s shareholding 31.12.2004. For Entra Eiendom the value is calculated from value adjusted equity published by the company. For other companies book equity is used. 2) Change in market value plus dividends received during the year, corrected for issues and share buy-backs. The return is weighted relative to total market value. 3) Profit after tax and minority interests. 4) Weighted relative to the State’s share of book equity. 5) State’s share of proposed dividend 2004. 3 4 A BETTER STATE OWNER The State has shareholdings in around 80 companies. Some billion, a rise of nearly 50 per cent. The reduction in the of these have a wholly commercial objective, while others State’s shareholding has been accompanied by an increase are also in pursuance of important social considerations. in the value of its remaining shares. For example, the Gov- In this ownership report, for the first time, we present an ernment reduced the State’s shareholding in Telenor from overall summary of the State’s ownership in 47 of these 77 per cent to 53 per cent, and received NOK 16.5 billion in companies. sales revenue. Nonetheless, the value of the State’s share- holding of 53 per cent in Telenor at 31 March 2005 was We have opted for an overall presentation in order to pro- around NOK 13 billion higher than in July 2003, when the vide a better insight into the State’s administration of its State owned 77 per cent. ownership. It is my aim hereby to contribute to openness around State ownership policy, and for it to demonstrate In some of the companies, the maximisation of commercial the professionalism of the ownership administration that is value is not in itself a key objective of the activities. The taking place in some of the central administrative environ- State’s ownership administration is then directed at goals ments within the State. other than the purely financial. For example, for all the health care enterprises as a whole, the average waiting time The current situation in Norway is good and business activ- in days fell by 17 per cent from 2003 to 2004. ity is sound. Value creation per capita in Norway is among the highest in the world – even when corrected for oil Operating or owning commercial activities is not a task revenues. There was a boom in start-ups in 2004 – a full that lies naturally with the public sector. State ownership 28,000 companies were entered into the register of Busi- should therefore be limited to cases where there are impor- ness Enterprises last year, some 18 per cent higher than in tant social interests at stake. Private ownership should thus 2003. The processing industry set a new exports record in be increased in Norway and public ownership decreased. 2004, exporting NOK 17 billion more than in 2003. This This should be done in a way that safeguards the State’s as- contributed to record exports from mainland-Norway. Com- sets, contributes to sound development of the companies in panies under State ownership also had a good year in 2004 question and protects important national interests. and the State received record dividends from its direct own- ership. For the financial year 2004, the State will receive I hope that this report will prove a useful insight into how NOK 18.2 billion from the companies covered by this report. the State’s ownership administration acts to safeguard and These are revenues which the Government uses to create develop major assets for the benefit of the companies and welfare in other areas. State ownership must be value-add- of society. ing. This is a fundamental premise for all our activities and is easiest to measure in the listed companies in which the Sincerely State is a part-owner. In the period from 2001 to date, the Government has sold shares in listed companies for around NOK 40 billion. In the same period, the value of the State’s Børge Brende listed shares rose from around NOK 225 billion to NOK 336 Minister of Trade and Industry 5 THE YEAR 2004 FOR THE STATE AS AN OWNER The Norwegian economy displayed a positive The Ownership Report presents an overview of 47 com- panies in which the Norwegian ministries administrate trend in 2004, with values on the Oslo Stock Ex- the State’s ownership interests directly. For 23 of these, change rising by 36 per cent. The listed compa- the chief object of State ownership is for the companies nies with State ownership interests have by and to concentrate to maximize their commercial value. These include some of Norway’s largest companies. The compa- large enjoyed solid value growth. In the main, nies operate in various sectors such as oil and gas, finance, 2004 was an improvement compared to 2003 for telecoms, artificial fertilisers and energy in full competition most of the companies wholly or part-owned by with privately-owned companies. For these, the chief ob- ject of the State’s ownership is to maximise the value of the State. For the commercial companies, the to- the State’s shares and to contribute to the solid industrial tal profit was NOK 57,3 billion against NOK 39,7 growth of the companies. The ownership in the majority of these companies are administrated by the Ministry of Trade billion in 2003. Similarly, for the other compa- and Industry, which at the start of 2005 was managing the nies (discounting the health care enteprises), the State’s ownership interests in 18 companies.