NPF grosses $400m in profit


SOLOMON Islands National Provident Fund (SINPF) has achieved a very strong above budget income for the year with an expected unaudited gross income of just over $400 million.

This is based on the Fund’s financial performance and key activities undertaken during the financial year ending 30 June 2021.

The outcome is based on an unaudited number, as their 2021 audit is still in progress.

General Manager, Mike Wate highlighted this during the declaration of the crediting rate for NPF members at Heritage Park Hotel yesterday.

Wate said the strong drivers to this strong positive outcome are from the following:

  1. Our offshore equity investments through managed funds Vanguard and UBS Australia share Fund in USA, Europe and Australia;
  2. Cash dividends from South Pacific Oil Limited, Solomon Telekom Company Limited and Bank of South Pacific;
  3. Interest from our subsidiary companies Heritage Park Hotel, Soltuna Ltd, Solomon Telekom Company Limited and Solomon Housing Limited;
  4. Interest from our long-dated Government development bonds;
  5. Commencement of rental for the recently completed refurbished Anthony Saru building, and
  6. Improved fair values of our key unlisted domestic equities South Pacific Oil Limited and Solomon Telekom Ltd.

Wate said as a result of their strong financial performance against their budgets during the year, potential business growth and with the government’s improved sovereign risk rating by rating agency Moddys, SPO recovered its declined 2020 fair value prices with STCL extending further its values.

He said Soltuna Ltd business prospects improved with the Government signing the Interim Economic Partnership Agreement (IEPA) with European Union in May 2020.

“Under the IEPA Soltuna has secured a derogation to secure fish from other fishing jurisdictions when inadequate fish are caught in our waters in October 2020.

“This has greatly improved the cannery’s throughput and productivity and financial performance as fish supply consistency is assured,” he said.

Wate said their investments that relied on international travel and tourism did not achieve their potential as the domestic market is limited and hence are performing below their pre-covid 19 levels.

These include the Heritage Park Ltd, Loloata Island Resort Ltd and Hibiscus Executive Apartments.

“Our other unlisted equity exposures Solomon Housing Ltd and Solomon Islands Submarine Cable Company Ltd fair values declined during the year,” he said.

Wate said Solomon Islands premium resort Tavanipupu island resort was leased to Private Islands Investments Limited for a 5-year lease whilst discussions are ongoing for the sale of the Fund’s shipyard to Sasape International Shipyard Limited.

He said direct investment cost of $19.9 million declined in 2021 from 2020 amount of $26.2 million during the year as the refurbishment of the 2 major buildings were completed during the year.

Wate said operational costs declined to $48.6 million in 2021 down from 2020 amount of $53.1 million as the Board deals with the uncertainties of the pandemic by cutting back on certain expenditures.

“With the adoption of new standards for additional investment classes, the Board has set aside more than $5.3 million for potential impairment losses up from $3.1 million in 2020.

“Adjusting for direct investment costs, impairment cost, and operations cost the Board will have around $300 million to consider to distribute for members crediting,” he said.

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