28th General Assembly of Shareholders

30.06.2017

GA recalled the existing members of the supervisory board and appointed new ones.

At the General Meeting of Shareholders of the company Luka Koper, d.d. held today, the management board presented the last year’s business results, which reflected growth in all segments, both with regard to transhipment and financial indicators. The company’s net revenue, totalling 190.4 million euros, was four percent above the level planned for 2016; operating profit and net profit exceeded the planned figure as well. Net profit was 16 percent above budget and amounted to a record 40.6 million euros. Based on the positive business results that were achieved by the company last year, the shareholders resolved to allocate a portion of distributable profit, i.e. 19.6 million euros, to the paying out of dividends in the gross amount of 1.40 euros per ordinary share. The shareholders then voted on the granting of discharge to the company’s supervisory board and management board and resolved not to discharge the management board and two supervisory board members, i.e. Alenka Žnideršič and Mladen Jovičič, of responsibility for 2016.  

At the General Meeting, the company’s management board stressed that favourable business trends are continuing this year as well. Compared to 2016, the company plans to increase maritime transhipment by three percent, sales revenue by 10 percent, EBIT by 17 percent and net profit by 15 percent. The business results achieved in the first three months of this year show that the planned business results will be exceeded again.  

The management board introduced all of the company’s key investments which are currently underway, with the increasing of the container terminal’s capacity remaining the company’s main target. In general, the largest share of investment has been allocated to the containers business segment, where, mainly due to time-intensive procedures in the sphere of obtaining adequate permits for the Pier One extension, the company is lagging behind its plan.  

To answer the question of the shareholder Slovenski državni holding (hereinafter SDH), representing a 51-percent share held by the Republic of Slovenia in the Port of Koper, the company’s management board presented a list of all external providers of port services (hereinafter EPS) and their turnover registered with the Port of Koper in 2016 vs. 2015. From the information supplied it appeared that in 2016, the cost of port services totalled 21.8 million euros and increased by 18 percent compared to the previous year. 

Based on the average daily number of entries to the Port of Koper by EPS employees, the management board explained that due to a daily maximum level of 920 entries and a daily minimum level of 250 entries, the daily need for employees varies considerably. If the company decided to abandon the EPS system and employ its own staff for the provision of port services, by providing the same level of services as in 2016 and by considering workers’ absences from work due to rest, sick days and holidays, it should employ approx. 1,250 workers. Considering the 2016 indicators, the cost of hiring additional labour would amount to 44.3 million euros, or 23.6 million euros more than paid by the company today for the provision of port services According to the company’s management board, by changing its business model the company would have to face increased operational risk related to fixed labour costs, which would not be dependent on transhipment due to large divergences in the daily need for provided services. As a consequence, this would be reflected in lower company profitability and investment ability.     

The management board introduced to the shareholders the company’s EPS co-operation system and the procedure for daily recording of the need for port services. In this regard, the management board pointed out that there is a limitation which applies to the amount of services provided by each EPS, namely a maximum of 10 percent of services on the company level and a maximum of 25 percent of services on the profit-centre level which can be provided by each EPS. In this manner, the company reduces its risk of depending on the services of one supplier. In addition, the company accurately monitors the quality of the provided services along with any violations, discrepancies and complaints that together represent the basis for eventual measures that need to be adopted. Due to its discovery of irregularities, the company ceased its co-operation with three external providers in 2016. In addition, the management board commented on the report of the Financial Administration of the Republic of Slovenia on irregularities discovered with regard to some external providers and explained that since 2017, the company has ceased its co-operation with individual entrepreneurs and has executed business agreements exclusively with companies who employ their own employees. In addition, the company also now requires that EPS sub-contractors provide port services with their own staff only. This requirement has been supervised by the company based on entry permits which are needed to enter the port. With regard to the suggested changing of the system applied in the provision of port services, the management board presented the model applied in the Port of Trieste and pointed out that a change can be implemented only if supported by the State: for instance, when there is no work in the Port of Trieste for workers employed with external providers, the workers are financially supported by the State, which makes such payment in the form of unemployment benefits.    

The management board then informed the shareholders about its commitment to follow the public procurement proceedings that have been applied by the company in a broader sense, also in relation to port infrastructure which has not been entirely intended for public operations. In addition, the management board explained the consequences of the spontaneous employee work stoppage which occurred last year by stating that the company’s business operations were not jeopardised and no clients were lost, and that despite this event, the 2016 business plan was exceeded.  

Lidija Glavina, President of the Management Board of SDH, who represented the majority shareholder, thanked the employees of the Port of Koper for their efforts and achieved results. By referring to the study commissioned by SDH with an external expert, she pointed out that there was still room for improvement in some business processes. Allegedly, the study pointed out some weaknesses in the company’s business operations which can be overcome. In addition, she explained that on the level of SDH, a decision was adopted to recall five members of the supervisory board representing the shareholders and – considering that the term of office of the existing members expires in three months – to appoint new members of the supervisory board. 

Therefore, the General Meeting of Shareholders recalled the existing members of the supervisory board and appointed new members who will take up their office beginning on 1 July 2017. From among the existing supervisory board members – shareholder representatives – only Rado Antolovič was re-appointed for a four-year term of office. The others appointed to the company’s supervisory board are:  Milan Jelenc, employed with the company Slovenske železnice; Andraž Lipolt, employed with the company Petrol; Uroš Ilič, attorney-at-law; and Barbara Nose, auditor. 

Finally, the shareholders adopted a resolution on the implementation of a special audit to examine the performance of port services over the period of the last three years. The representative of Vseslovensko združenje malih delničarjev challenged three resolutions adopted in relation to the supervisory board members.