Privatisation and Corporatisation Board (PCB) reveals that State-Owned Enterprises (SOEs), despite generating a revenue of USD 3.2 billion, experienced a decrease in net profits last year. While a total of 31 companies in the nation were SOEs, 20 companies were 100% government-owned. According to the annual report for the last quarter of 2023, the SOEs generated USD 3.2 billion in revenue. However, the net profit accumulated totals USD 2.8 billion, reflecting a decrease in net profits by USD 1.5 billion.
The report also sheds light on the losses incurred by 18 companies, most of which are funded by the government or receive financial assistance from the government. While the SOEs' assets have increased in value from USD 10.7 billion to USD 11.5 billion, the value of loans issued to the companies last year totals USD 72.6 million.
The annual breakdown of loans granted to companies is as follows:
2021: USD 1.99 billion
2022: USD 2.20 billion
2023: USD 2.72 billion
The government ensures the provision of adequate financial assistance to SOEs in the form of capital, grants, and subsidies through a set annual budget. In 2023, a total of USD 298 million was spent from the government's budget to provide financial assistance. While USD 12.5 million was issued as grants, USD 243 million was issued as subsidies. Meanwhile, a total of USD 65 million was given as capital.
Additionally, the report indicates that several SOEs recruited new employees. The companies which recruited the greatest number of employees include Fenaka Corporation Limited, Housing Development Corporation (HDC), State Electric Company Limited (STELCO), and Maldives Transport and Contracting Company (MTCC).
Details of the recruitment of employees are as follows:
MTCC: 734 employees
Fenaka: 682 employees
HDC: 642 employees
STELCO: 302 employees
PCB's report outlined that companies spend approximately USD 97.2 million to ensure the provision of salaries to the employees. Additionally, statistics released by the Ministry of Finance show that the debt incurred by the companies during the previous administration amounts to USD 6.3 billion.
The deteriorating financial situation of SOEs when the current administration assumed office was reiterated by President Dr. Mohamed Muizzu on multiple occasions. The president highlighted that profitable companies were also facing decreasing net profits, adding that the previous administration did not submit payments totaling USD 583 million for government projects contracted to the SOEs.
The government has decided to implement several measures to make SOEs profitable, aiming to reduce government spending on their operations. Under these measures, a policy has been formulated to categorise SOEs. President Dr. Muizzu further emphasised the ongoing efforts of the government to seek strategies through which the SOEs can repay the loans issued.