Maldives’ SOEs Achieve Growth in Banking and Utilities, Face Setbacks in Real Estate in Q2 2023

The State-Owned Enterprises (SOEs) of Maldives, have demonstrated varied performances in the second quarter (Q2) of 2023, according to the Privatization and Corporatization Board’s (PCB) latest quarterly review. 

The combined net profit of self-sufficient SOEs has seen a notable increase from MVR 1.48 billion in Q2 2022 to MVR 1.51 billion in Q2 2023, marking a 2% growth equivalent to MVR 30.70 million. 

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In the banking and finance sector, remarkable profitability was observed. The highest net profit was reported in this industry, with MVR 592.47 million, indicating robust financial management and effective strategic operations.

The utility industry showed the most significant percentage growth, with a 159% increase in net profit from MVR 79.05 million in Q2 2022 to MVR 204.50 million in Q2 2023. This sector comprises three key players – STELCO, MWSC, and FENAKA – all of which reported substantial profit growth. For instance, MWSC’s profit soared by 205%, STELCO’s by 183%, and FENAKA’s by 5%.

While other industries showed profit growth, the transport, construction, and real estate industry faced a downturn, with the lowest net profit of MVR 67.49 million and a significant 88% decline in net profit percentage.

Bank of Maldives (BML) stands out with the highest net profit growth in value among self-sufficient SOEs. With an increase of MVR 197 million (a 56% growth), the bank’s revenue spiked mainly due to interest income while managing to keep operating expenses in check.

Despite a dip in revenue, State Trading Organization (STO) nearly doubled its net profit, growing by 95% to MVR 147.44 million. 

Housing Development Corporation (HDC) reported a drastic net profit decrease of MVR 428.06 million (-90%), primarily due to a significant drop in property sales. Similarly, RDC witnessed a 246% decrease in net profit, with falling revenues across various segments.

MTCC saw a 38% decline in net profit despite a 23% increase in total revenue. The rise in direct costs outpaced revenue growth, leading to this downturn.

The Q2 2023 performance of Maldives’ SOEs presents a complex picture. While sectors like banking, finance, and utilities have excelled, others like transport, construction, and real estate have struggled. This mixed performance indicates the diverse challenges and opportunities faced by these enterprises in a dynamic economic environment.

The PCB’s report serves as a crucial tool for understanding the operational health and strategic direction of these SOEs, providing valuable insights for policymakers, investors, and stakeholders.

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