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MTDC frontman on a course correcting journey

Mohamed Rehan
04 November 2022, MVT 20:44
MTDC Managing Director Thazmeel Abdul Samad during an interview with Mihaaru News-- Photo: Nishan Ali
Mohamed Rehan
04 November 2022, MVT 20:44

When Thazmeel Abdul Samad took top management position of Maldives Tourism Development Corporation (MTDC), the task ahead of him was dauntingly huge. Four years ago, when Thazmeel became MTDC’s Managing Director, the first issue to tackle was to change the company’s image. The state-owned enterprise was notorious for being the least profitable government venture to date.

The company had attracted strong public criticism and scrutiny for its continued failure to churn positive revenue.

Thazmeel took helm with an indomitable will to change the course and trajectory of the company. His unflinching efforts have borne fruit as the company has begun to progress forward at a pace previously unprecedented.

“Since taking charge of MTDC, several initiatives have been put to motion to transform the negative image and its losses into profit. When we took the reins of the company, it had not paid dividends for 11 years. We had to operate the company under heavy debts,” he explained.

“I would like to highlight with pride that the company is currently robust and generates profit. We have established several revenue streams to MTDC. Our efforts to make the company financially sound and sustainable is evident from our most recent audit reports,” he added.

MTDC MD Thazmeel Abdul Samad with the company's Chief Finance Officer Ibrahim Latheef (L)-- Photo: Nishan Ali

He affirms the company is financially strong enough to invest on treasury bills if and when the state requires for it.

“We have already done it [invest in treasury bills] once,” Thazmeel confirmed.

Immediately after taking charge of the heavily indebted state-owned enterprise, Thazmeel claims he left no stone unturned in the attempts to reduce debts. He had personally "knocked on every door" that could lead to any prospective progress.

The company attracted some heat for its decision to pay dividends at MVR 0.50 per share, many questioning if this constituted as a profitable growth of the company. Thazmeel had the perfect answer for it.

“My answer to that is, for 11 years this company ran in debt. But following that, the company has paid dividends for the last three years, with total dividend declaration reaching close to MVR 40 million, and this includes dividends to state,” he said in response to the criticism.

This dividend declaration is comparatively higher in terms of state-owned enterprises that pay dividends to the state. MTDC reports a total of 25,000 shareholders whereas its SOE contemporaries have a shareholder count between 10,000 to 12,000.

“If we look at in terms of sheer shareholder number, our dividend declarations will be comparatively higher than others. My aspiration for MTDC is that we can once again pay dividends for either MVR 2 or MVR 4 per share, and push the company’s financial position to facilitate this. We are seeking potential investments to ensure our profits improve prospectively,” Thazmeel detailed about the company’s vision.

The current share face value is MVR 10, whereas trading price is currently at MVR12 which confirms a MVR 2 per share improvement. According to him, this is improvement comes as a result of continued efforts by MTDC's management to increase its annual earnings. Meanwhile, the company is seeking all potential avenues to boost the revenue numbers, one such initiative is the development of an administrative building for its operations and setup sustainable revenue streams at the establishment. To this end, MTDC has already acquired land from Hulhumale’ through Housing Development Corporation (HDC), where a seven-story office complex will be developed. Post completion, MTDC will rent its floors to different businesses and ventures for their operations.

Currently all of MTDC’s operations are carried at Maldives Association of Tourism Industry’s (MATI) headquarters. Thazmeel aims to shift the company’s operations elsewhere for the collective benefit and contentment of his employees, while ensuring the company increases its earning potential.

“We are developing the office complex at one of the prime locations in Hulhumale’, we have already settled full payment for the plot,” he said while affirming he envisions the company’s office complex development will complete sometime in 2023. MTDC has already submitted the design concept of the office complex to HDC.

The plot, in front of Hulhumale’ Central Park, will be developed using the latest construction technology according to MTDC Managing Director. The state-owned enterprise will utilize either one of two of the complex’s floors while the rest will be rented out for commercial purposes. The complex reportedly will accommodate a cafeteria, lobby along with other state-of-the-art facilities for employee utilization.

“Today we can develop our own office complex with our own funding. We have come this far from the work we started immediately after taking charge,” Thazmeel noted.

MTDC Annual General Meeting 2021; held earlier this year in June-- Photo: Fayaz Moosa

According to him, the company's revenue seeking efforts do not culminate with the office complex, but rather MTDC will begin with vigorous initiatives to generate income from the tourism sector, through a sustainable approach. Thazmeel aims to develop a tourist resort fully operated under MTDC.

“We need to be directly involved in the tourism industry, which means we need to have tourism beds that we directly operate. Discussions required for the project is held within the company’s senior management. We hope MTDC will have its very own tourist resort in a not-too-distant future, at least a 100 villa one” Thazmeel spoke extensively about the company’s expected future.

Speaking about MTDC’s plan for a tourist resort, he added, “We are currently holding talks to setup financing and acquire an island for the project. I do not wish to divulge additional details about the initiative for the time being since it is still an actively-discussed project.”

Though MTDC had generated revenue by leasing uninhabited islands for tourist resort development, the company itself never had any direct involvement in the country’s largest economic sector. According to him, the company has since shifted its leasing approach to joint-ventures.

Under MTDC’s joint-venture initiatives, Haa Dhaalu Atoll Naagoashi will be developed into a tourist resort; with work of the project already in-development. The joint-venture is formed between Dubai’s famous R.A.W Galadari owning 85 percent, and MTDC with 15 percent. First phase of the tourist resort is expected to be completed sometime during 2023, while the property expects an official unveiling by the following year’s end.

MTDC Annual General Meeting 2021-- Photo: Fayaz Moosa

The uninhabited island in one of the upper-northern atolls, is 76 hectares in space. MTDC-R.A.W Galadari joint-venture will develop the property under three distinct phases owing to the island’s size. This tourist resort initiative will reportedly be a game-changer in the Maldivian tourism sector according to Thazmeel while several globally famous brands will setup their branches at the property following official debut. The development project is valued at over USD 400 million, while the resort is coveted to be one of the largest in terms of bed capacity. According to the joint-venture agreement, MTDC will earn a fixed quarterly profit – which it ensured as conditions when entering the arrangement with R.A.W Galadari.

“Though MTDC is paying head-lease to the state, from both of the properties we have leased, head-lease from the resort at Naagoashi will be settled completely by the property’s operator,” Thazmeel said, explaining the arrangement.

MTDC’s Managing Director is hopeful that the current trajectory of the company will benefit its employees and shareholders in the long-run, while stakeholders can expect to reap full reward in prospective years.

“All of the efforts for during these five years will be materialized by the end of 2023, and in the prospective five-year term the company will generate its revenue from all of these avenues. That is the direction where this team and I are headed,” Thazmeel declared.

Thazmeel envisions 90 percent of the company’s efforts towards sustainable profitability, will be realized before the end of 2023. The current management is vigorous in its effort to gain a strong financial footing and stand beside its SOE contemporaries in terms of contributions to the state and public.

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