Island Aviation Services (IAS), which manages the national airline, Maldivian, incurred a net loss of MVR 159 million last year.
The quarterly report of state-owned enterprises released by the Finance Ministry for the year 2021 shows the IAS incurred the highest loss in Q2. IAS’ revenues took a significant hit in Q2, resulting in the company incurring a loss of MVR 99 million.
IAS had reported a total revenue MVR 1.2 billion in 2021 – mainly from domestic flight movements. It included a total revenue of MVR 326 million in Q3 2021, and a revenue of MVR 425 million in Q3 2021. The 30 percent growth was attributed to an increase in flight movements.
However, the direct costs of the company grew much higher than revenue, resulting in the gross profit margin declining against Q3 2021.
The report shows the total overhead expenses of the company grew by 21 percent, resulting in Q4 2021 ending with a net loss of MVR 24.7 million. The figure is 158 percent higher than Q3 2021.
The increase in expenses was attributed mainly to high administrative and selling and marketing expenses. As such, the company’s administrative expenses increased in Q4 2021 by 31 percent compared to the same Q4 2020, and by 20 percent compared to Q3 2021 - mainly due to increase in insurance and staff salaries and allowances due to the increase in rates of pilot.
Selling and marketing costs showed a growth of 666 percent and 200 percent compared to Q3 2021 and Q4 2020, respectively.
The biggest expense of the company was staff cost, which recorded a growth 11 percent in Q4 2021 compared to Q3 2021. Meanwhile, other expenses recorded a growth of 194 percent and printing expense by 173 percent compared to Q3 2021. The growth in salaries is 51 percent higher and the maintenance expenses 49 percent higher than Q4 2020.
Finance Ministry noted in its concluding remarks that cost management was an important element for profit maximization, and advised IAS to try to achieve efficiency, economy and effectiveness to improve business performance.