Profits soar for Sweden’s state-owned companies

Sweden’s state owned companies are set to earn record-breaking profits this year, although not every company has had a stellar 2010.

According to a data compiled by the TT news agency, Sweden’s 27 fully or partially state-owned companies are on track to break the combined profit record set in 2006.

Nevertheless, certain companies continue to struggle in the wake of the financial crisis.

Scandinavian airline SAS, for example, continues to lose money even after being forced to ask the state and other shareholders for major capital injections twice last year.

But as a group, Sweden’s state-owned companies have perhaps never been better.

After a modest increase at the start of the year, profits shot up during the second quarter, according to TT’s compilation.

The companies’ combined profits before tax increased by 76 percent to nearly 20 billion kronor ($2.75 billion) in the second quarter of 2010.

The majority of the profit rise stems from the Norrland region of northern Sweden, home of the LKAB mining company, which saw profits increase by 5.7 billion kronor in the second quarter.

Even energy company Vattenfall, another state-owned cash cow with strong ties to Norrland, performed exceptionally well in the second quarter, with profits up by 3.4 billion.

The companies’ strong profits will likely result in higher dividends paid to the Swedish state – or to higher sale prices, should any state-owned companies or ownership stakes be sold.

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