Despite sweeping rhetoric on national development and diversification, the 2024 Annual Report of Maldives Transport and Contracting Company (MTCC) reveals a more troubling picture of financial fragility, operational strain, and overdependence on state-driven projects.
Revenue Up, But Profitability Takes a Hit
While MTCC reported a revenue of MVR 2.15 billion in 2024, net profit after tax fell to a mere MVR 45.2 million—a significant drop from the company’s record highs in recent years. This represents a worrying contraction in profitability, especially considering the company’s bloated project portfolio and soaring operational commitments.
The numbers suggest that for all its celebrated “resilience,” MTCC is grappling with cost inefficiencies, delayed receivables, and thin margins. The dividend payout shrank to MVR 3 per share for 2023, compared to MVR 4 the previous year—a detail downplayed in executive messages but not lost on investors.
Overreliance on Government Projects
Chairman Mohamed Afeef Hussain proudly touts over 365 state-sponsored projects valued above MVR 14 billion. But analysts argue this heavy dependency on Public Sector Investment Program (PSIP) contracts leaves MTCC dangerously exposed to political and fiscal risks.
A significant portion of these projects remains either stalled or incomplete, exacerbating the company’s cash flow issues. The Chairman’s own remarks acknowledge delayed material supplies—especially rock boulders essential for infrastructure works—while glossing over the deeper systemic issues behind the delays.
Cash Flow Crisis and Customer Confidence Woes
One of the starkest admissions in the report comes from the Trading Division, which openly cites cash flow constraints that led to stock shortages and failure to fulfill customer orders—particularly for key marine engine brands like Yanmar and Suzuki. This not only undermined customer confidence but potentially weakened longstanding relationships in the market.
Promises of service expansion and digital transformation ring hollow when juxtaposed with MTCC’s operational struggles and shrinking capacity to serve its own fleet, let alone external clients.
Logistical Failures and Internal Inefficiencies
In an unusual show of candor, the Managing Director DCP (Retd.) Ahmed Saudee points to internal delays—even in processing basic spare part requests—that have undermined project momentum and inflated costs. This signals deep-rooted issues in MTCC’s governance and workflow systems.
Despite establishing new reporting hierarchies and digital upgrades, there is little evidence in the report to show that these structural reforms have translated into real-world efficiency or improved shareholder value.
Leadership Lacks Commercial Depth
The company’s top leadership, primarily composed of appointees with backgrounds in law enforcement and public administration, raises questions about the commercial competency at the helm. For instance, both the Chairman and Managing Director come with long civil service or police resumes—commendable in public service, but arguably mismatched with the demands of a company managing billions in commercial infrastructure contracts.
Sustainability and Diversification Plans Still Vague
MTCC claims to be diversifying into resort reclamation and private sector projects, but the report offers few concrete figures or timelines. Plans to launch a new taxi service in Malé or expand ship repair capacity are aspirational at best, with execution timelines vague and financing sources unclear.
The much-touted Bodu Jarraafa 2 dredger may have boosted capacity by 29%, but without corresponding revenue growth or strategic private sector wins, it risks becoming another underutilized asset.
Conclusion: More Rhetoric than Reform
MTCC’s 2024 annual disclosure reads more like a political manifesto than a financial blueprint. While the narrative is heavy on national pride and development buzzwords, the financials tell a different story—one of shrinking profit margins, operational inefficiencies, and overextension.
Unless the company takes urgent corrective measures—starting with financial discipline, leaner project execution, and genuine private sector engagement—it risks sinking under the weight of its own ambition.
