The business records of STO for last year gives a good news for the people. Because, reducing the profit margin and providing services at affordable price for the people is beneficial for the people.
The business turnover for STO did not reduce last year. However, preliminary calculations show that the total profit will be less than that of 2015. This change was seen at a time President Yameen recommended STO to focus more on providing affordable services rather than making huge profits.
Speaking at the ceremony held to mark the 50th anniversary of STO, the President said that government corporations should not be making huge profits, but should focus on providing various services to the people at affordable prices. He also said that these companies should not only focus on Maldives, but also should be able to compete in the international market.
STO has achieved, what the president has instructed. STO reduced their profit margin and thereby made their services more affordable. In addition, the Singapore branch of STO is also making profits now after running at a loss for 6 years.
STO’s profit reduced mainly due to oil trade. Even though price of oil in the international market was rising, STO did not increase the price of oil significantly. So, this is one reason for the decrease in STO’s net profit.
In addition, the government stopped the subsidies on electricity last year. But, if oil price rise and the fuel surcharge increases, it will be a burden on the people, hence STO did not increase the price of oil.
If STO trades oil with the same profit margin, the price of diesel will be higher than that of now. Thus, the fuel surcharges will increase. It should be noted that STO took all these things into consideration.
STO, spends a lot on various social programs. STO increased their spending on youth empowerment, sports and on people with disabilities. STO runs pharmacies in all islands of Maldives. In small islands the pharmacies are run at a loss. Even now more than 500 staffs are employed in the pharmacies. Even if the profits of STO did not increase, this did not affect all these staffs.
Maldivians often get involved in businesses that provide quick returns. Hence, private businesses do not open pharmacies in small islands. There are many things that should be noted from the business report of STO. If we analyze carefully, it is very easy to understand why the profits did not increase last year.
Even if the profits reduced, the shareholders of STO get a high return compared to other companies of the Maldives. Companies that make more profit than STO gives much less to the shareholders compared to what STO gives.
STO reduces profit margin and provide better price for people!
