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Review of the Swedish Figure Skating Federations annual report

09 MAR 2020 22:16
Med anledning av StKf:s ekonomiska analys baserad på SKF:s Årsredovisningar 2016/17, 2017/18 samt 2018/19 (se publicering 27 februari 2020) så publicerar vi, på efterfrågan, även en version på engelska.
  • Uppdaterad: 09 MAR 2020 22:16

Review of the Swedish Figure Skating Federation’s annual report 

  2018/2019 2017/2018 2016/2017  
Income Statement (MSEK)        
Revenue  17,2 33,4 19,1  
Costs   -20,7  -34,7 -19,1  
Operating profits     -3,5 -1,3 0  
Net of financials 0,6  0,6 0,2 Sale of securities
Profit after finance  -2,9 -0,8 0,2  

The big difference between individual years is explained by events (which have made losses).

 

Balance Sheet (MSEK)                      
Fixed assets (incl. securities)   7,2 8,5 10,1  Securities
Inventories  1,3   1,0   0,9  Receivables etc
Cash and bank balances  0,5    0,8 1,2    
Total Assets       9,1  10,3   12,2  

 

 

Liabilities and Equity (MSEK)          
Equity      3,6  6,5  7,3   Decreasing year by year
Short-term liabilities   5,5   3,8  4,9  Increasing
Total liabilities and equity   9,1  10,3

12,2

 

 

 

As of 30-06-2019, the Swedish Figure Skating Federation had an equity of SEK 3.6 million (SEK 6.5 million). The operating result is strongly negative. Securities have been sold to decrease the deficits. The Secretary-General states in an email to all the district federations 23 feb 2020 that the funding from the Swedish Sports Federation (RF) will decrease by SEK 2 million p.a. by 2020. At the same time, it seems that the Swedish Figure skating Federation has incurred more fixed costs, project costs and one-off costs. This means that the result for the current year fiscal year (2019/2020) can be expected to be even worse than the result for 2018/2019.

With an ingoing equity of only SEK 3.6 million and a profit forecast indicating a loss of some further SEK -4 to -5 million for the current year, the situation is worrying. The Swedish Figure Skating Federation is in obvious risk of consuming all its equity and going bankrupt.

Forecast Equity Development         (MSEK)  Not.
Equity 30-06-2019      3,6      Fact
Est. operating profit 2019/2020   -4   -3,5 for 2018/2019
Est. cost for investigation - Q1 2020       -1,0   Estimation
Forcasted equity 30-06-2020, ca    -1,4  

 

It is obvious that drastic measures need to be taken if the Swedish Figure Skating Federation should avoid default or bankruptcy. Even if all personnel would be dismissed immediately, it does not appear to be sufficient to remedy the situation. The crisis awareness seems to be limited. Instead of implementing drastic cost savings, even greater costs are being incurred. The Board of Directors' report states the following;

“With surpluses from previous international events, the federation's operations, at the current level, are  secured for several years to come. The available capital will be used for investments with the aim of achieving the business goals that have been set, plusStrategy 2026. However, the federation continues to strive to achieve a balanced result and to be able to have equity which safeguards the business in the longer term. "

Please note that this statement is directly misleading. At the current level, i.e. with exactly the same income and expenses as stated in the annual report, all equity will be consumed in 10-14 months from 30-06-2019. At the same time, it is clearly stated that the federation is facing decreased funding from Riksidrottsförbundet RF (the Swedish National Sports Federation) and also taking on a larger cost base than in previous years, which means that equity is actually consumed faster than that.

 

The Board of Directors' report also states;

“However, this year's results end at a significantly larger negative result than budgeted.

An organizational change was initiated during the year with a greater focus on the sporting development when a new sports manager was recruited. The federation's secretary general ended her assignment in the spring.

The federation has also started a collaboration with the Rights Office to strengthen the association's sponsorship income.

The work of implementing Strategy 2026 and a partially new approach to the Operational orientation in which new material was produced has led to increased costs. The cost items that have increased most against the budget are personnel costs, consultancy costs,  production of materials and advances on the contribution from RF, which in previous years were not correctly allocated.

During the current year, two more people have left their positions at the federation and a review of the work is ongoing, as well as new recruitment of office and sports administrators and a head of the federation, replacing the current secretary general. "

 

It is now February 2020, eight months since the closing date for fiscal year 2018-2019, 30-06-2019. There are no indications that the financial situation has improved. Instead, the Swedish Figure Skating Federation appears to be entering into an acute financial crisis.

All in all, there is reason to raise very big question marks about the federations ability to analyze, manage and sort out the financial situation.

Skribent: Stockholms Konståkningsförbund
Epost: Adressen Gömd

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Stockholms Konståkningsförbund
c/o Karin Queseth, Honnörsgatan 16
170 69 Solna

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