The shareholder rating “very good” was received for the operation of SJSC “State Real Estate” in 2020 - this is the historically highest rating for the operation of SRE. Evaluating the progress of SRE without the impact of external circumstances, the financial targets planned for 2020 during the pandemic have been achieved and exceeded, as well as financial stability has been maintained.
“This is the historically highest evaluation of the performance of SRE, which a capital company can only receive if it has achieved or exceeded all the targets planned for the reporting year, taking into account deviations due to reasons beyond the company's control. This is a testimony to good corporate governance and the fact that we have objectively and reasonably assessed the circumstances that affected our operations last year and have selected the right direction towards the goals set out in our medium-term strategy, even in difficult circumstances, namely during a pandemic. We will continue our journey towards improving corporate governance and responsible business conduct,” says Renārs Griškevičs, Chairman of the Board of SRE.
In 2020, SRE helped customers to overcome the consequences of the pandemic by granting rent discounts and relieving them of interest and contractual penalties. 199 tenants received support, with the total amount of support exceeding one million euros.
The above-mentioned Covid-19 crisis support measure resulted in a negative deviation of 4.2% for net turnover ratio, a negative deviation of 25.19% for net profitability and a negative deviation of 27.03% for return on capital. The justification provided by SRE for negative deviations has been recognised as substantial by the Cross-Sectoral Coordination Centre (CSCC), which assessed the fulfilment of the 2020 financial objectives of the SRE with a rating “good”. Despite the challenging economic conditions, SRE has exceeded the planned amount of revenue from the expropriation of land plots for private construction (PAZ) and state real estate and has closed 2020 with a profit of 2.99 million euros.
The shareholder and the Cross-Sectoral Coordination Centre (CSCC) evaluates the annual operating results of SRE in accordance with the methodology approved by the Cabinet of Ministers in 2016. Evaluation is provided to all capital companies in which the state has a decisive influence. The evaluation takes into account the objectives set in the medium-term operational strategy, the indicators of the non-financial and financial objectives achieved during the reporting year, as well as the circumstances independent of SRE, which influenced the possibilities to achieve the set objectives.
Last year, under the conditions of the pandemic, 17 national development projects with a total budget of 29.5 million euros were completed under the leadership of SRE. Under the conditions of the pandemic, in accordance with the precautionary and safety requirements, work at 54 national construction sites with a total project budget of more than 193 million euros continues under the management of SRE. SRE provides professional real estate management and administration for approximately 400 real estate properties with 1100 buildings of 1.02 million square metres and more than 3600 land properties of 9.6 million square metres. The company is one of 23 Latvian companies that have received the highest platinum award as part of the Sustainability Index of the Institute of Corporate Responsibility and Sustainability, confirming the good governance and sustainability of its operations. SRE was founded in 1996, 100% owned by the Ministry of Finance of the Republic of Latvia.
