The Steam Packet is to pay a £1m dividend to its Treasury shareholder for the first time.

And Isle of Man Post Office will also have to pay £500,000 out of its profits.

Treasury Minister Dr Alex Allinson said the state-owned ferry operator had made a significant loss during the Covid pandemic but it had now started to make a profit again it was only right it should pay a dividend.

He told a pre-Budget press briefing: ‘It’s the first since it was purchased.

‘The reason Steam Packet was bought in the first place was because it was making around £20m profit a year and all of that was going off to overseas banks and hedge funds.

‘It was brought into public ownership with the intention that routes would be maintained and those profits would come back into then government and then be able to be spent for the benefit of Isle of Man people rather than the benefit of investors.

‘With Covid those assumptions went out of the window. It made a significant loss but it is now in a position where even with increased fuel prices they are starting to make a bit more of a profit and so it is absolutely right as we go forward that profit it brought back for use in general revenue. So it will be £1m this year.’

The Manx government signed a deal in 2018 to purchase the Steam Packet company for £124m, in a move that promised to bring stability to the ownership of the island’s lifeline ferry operations.

Isle of Man Post Office went back into the black for the first time in 2020-21 after posting three years of losses and it is now set to pay a £500,000 dividend to Treasury.

The Post Office board has previously criticised the imposition of the levy, before it was stopped three years ago, as it had turned a loss-making company into one that made a paper loss.

But Dr Allinson said: ‘Now their bank balance is relatively more stable and again it is absolutely right that some of that money comes back into general revenue rather than sits in their cash reserves. We’ve worked closely with the board to explain the need for that. They also do have reserves which can be used for investment.’

He said the reason post offices are closing is that their business model is uneconomical. That’s not to say they aren’t important for our community.’