Shareholders and board members at the annual general meeting of state-run tourism company MTDC.

State-owned companies record over 2 billion loss

There are three SOEs that have to spend twice or even thrice more on employee salaries and allowances than they earn.

10 July 2024

By Ahmed Naif

State-Owned Enterprises (SOE) posted a loss of MVR 2.27 billion in the last quarter of last year, with the increase in the number of employees of the companies crossing MVR 1 billion in salary expenses, the Privatization and Corporatization Board (PCB) said in a report released Wednesday.

In its last quarter report on state-owned companies, the PCB noted that 32 state-owned companies earned a total of MVR 13.27 billion in revenue last year. STO, the largest state-owned trading company, earned 30% of it.

However, after expenditures, the  state-owned companies are left with a loss of MVR 2.27 billion.

The report noted that the Housing Development Corporation (HDC) accounted for the bulk of the damage. The company posted a loss of MVR 3.23 billion in the last quarter of last year. The main reasons cited in the report were:

  • Stalling of Hulhumale Yacht Marina Project 

  • STELCO has not received the money to establish a utility network in Hulhumale Phase II, and spending on it despite has led to major losses to the company

  • Damage caused by reduction of rent of Hiyaa flats and waiver of penalties for non-payment of rent

More than 34,000 employees

The PCB report noted that the number of employees in state-owned companies increased to 34,369 at the end of last year. Before that, in 2022, the number was 30,866. Therefore, government companies have added 3,483 employees during the year. Thus:

  • The companies with the largest number of employees are Fenaka, MTCC and MACL

  • Fenaka has added 682 employees in one year

  • MTCC has 4,777 existing employees, 734 additions during the year

  • MACL has 4,031 existing employees

The report noted that the expenditure on salaries of government companies has reached MVR 1.5 billion.

There are three companies that have to spend more on employee salaries and allowances than they earn. These are:

  • Addu International Airport Pvt Ltd (AIA): Salaries and allowances are spent 356% more than revenue

  • Kadhdhoo Airport Company limited (KACL): 207% more than revenue spent on salaries and allowances

  • Regional Airports Company Ltd (RACL): Spends 270% more on salaries and allowances than revenue

Among those that can complete expenditure via revenue, the companies that spend more than 50% of their revenue on employee salaries and benefits are:

  • TradeNet: 84% of revenue for salary and benefits

  • PSM: 61% of revenue is spent on salaries and allowances

  • WAMCO: 57% of income for salaries and allowances

  • MPL: 53% of revenue is spent on employee salaries and allowances

The report further shows that the asset value of state-owned companies rose to MVR 178.14 billion. Their debt stood at MVR 113.41 billion.