STO revenue climbs to MVR 6.98 billion as fuel margins narrow

State Trading Organization's second-quarter revenue reached MVR 6.98 billion — up 27 per cent on the first quarter and 96 per cent on the same period last year — in a quarterly report the state trader filed to the Maldives Stock Exchange this week.

The surge is almost entirely a fuel story. Petroleum made up 86 per cent of turnover as global prices climbed on the war-driven market, and STO's costs climbed with them: cost of sales rose to MVR 6.22 billion, and the gross margin compressed to 10.8 per cent from 14.3 per cent in the first quarter. The company attributes the growth primarily to higher global fuel prices — which is another way of saying it is buying dear and reselling on a narrow, regulated spread.

Operating profit fell 12 per cent to MVR 324 million, weighed by impairment provisions on receivables that jumped to MVR 88 million from MVR 21 million a quarter earlier — a line worth watching in an economy where the state's own bills are running late.

The bottom line still improved. Net profit came in at MVR 280 million, up 71 per cent on the same quarter last year, helped by MVR 71 million in dividend income from subsidiaries and a swing to net finance income. Earnings per share reached MVR 248.

The quarter also closed a structural chapter: STO completed the transfer of its retail pharmacy and pharmaceutical operations to the State Pharmaceutical and Medical Supply Corporation, moving 725 employees and leaving the trader with 1,881 staff at the end of June.

The balance sheet stood at MVR 17.82 billion in assets against MVR 11.74 billion in liabilities, with cash up MVR 311 million in the quarter to MVR 862 million. The current ratio eased to 1.30 and interest coverage to 3.25 — both softer than the first quarter, neither yet uncomfortable.