MTCC’s 2024 revenues plummet amid cash flow issues due to payment holdup

The Maldives Transport and Contracting Company (MTCC) reported a steep decline in their revenues and profits in 2024, as it faced mounting cash flow challenges due to persistent delays in payments for its construction and dredging projects.

The 2024 annual report released by MTCC on Tuesday shows the state-owned enterprise generated MVR 2.16 billion in revenue last year – a 33 percent decline compared to 2023.

MTCC said that this downturn was primarily driven by a drop in revenue from the construction and dredging segment, which was significantly impacted by cash flow challenges stemming from delayed payments on project receivables.

According to MTCC, persistent delays in receivables severely disrupted the company’s working capital cycle.

MTCC’s operations are structured around four key strategic business units; trading, construction and dredging, transport, and real estate, with trading and construction and dredging being the primary revenue generators.

Revenue by key business units:

• Construction and dredging: MVR 1.72 billion (down by 37 percent from MVR 2.76 billion in 2023)
• Trading: MVR 267 million (down by 6 percent from MVR 284 million in 2023)
• Transport: MVR 149 million (up by 3 percent from MVR 143 million in 2023)
• Real estate: No revenue

The company also generated MVR 20 million in revenue from other segments, comprising of ship agency, docking, logistics and maintenance services.

The MTCC attributed the steep 37 percent decline in revenue from its top revenue generator - the construction and dredging segment - to delays in receiving the project receivables.

According to MTCC, these cash flow constraints significantly affected the timely procurement of key construction materials, particularly rock and other heavy supplies critical to marine and land-based infrastructure projects. The resulting material shortages disrupted site operations, delayed project execution timelines, increased idle time of equipment, and led to higher operating costs. Collectively, these factors had a material impact on project progress, revenue generation, and overall profit margins for the segment.

The company’s operating profit and net profit also declined, in line with the overall revenue contraction. As such, the operating profit declined by 40 percent from MVR 278 million to MVR 166 million, while the net profit declined by 53 percent from MVR 97 million to 45 million.

The MTCC is set to hold its 2024 Annual General Meeting on June 17.