Fenaka Corporation has achieved remarkable progress in addressing its financial challenges over the past year. The company, which provides utility services across the Maldives, has been focused on improving its financial situation and reducing operational costs to ensure sustainability in the long run.
Reducing Excess Expenses and Debt
A recent report by Fenaka outlines the company’s efforts to streamline operations and reduce financial strain. When the current management team took over, Fenaka was burdened with over MVR 4 billion in debt. The report notes that this situation was the result of several factors, including excessive staffing, unprofitable projects, and increased operational costs.
To address these issues, the new management team prioritized reducing the workforce in a way that would not affect the quality of service. They also halted loss-making projects and focused on cutting unnecessary expenses. These efforts have led to a reduction of MVR 160 million in operational costs, which has been a significant step toward financial stability.
Debt Repayment Efforts
In addition to reducing expenses, Fenaka has made notable strides in repaying its debt. As of November last year, the company had repaid MVR 300 million of the MVR 1.3 billion owed in company debt. Furthermore, MVR 600 million of the MVR 3.4 billion owed to vendors has been paid off, bringing Fenaka closer to resolving its financial obligations. A total of 281 vendors have now been fully paid, helping to strengthen relationships and maintain a reliable supply chain.
Challenges in Maintaining Services
Despite these positive steps, Fenaka faces significant challenges due to its primary revenue source: utility services provided at regulated rates. The company’s debt repayment efforts are taking up a considerable portion of its revenue, with 40% of this year's income allocated to repaying debts. This situation makes it clear that Fenaka requires financial restructuring and external assistance to continue meeting its obligations while maintaining uninterrupted services to its customers.
Expansion of Services Across the Atolls
While financial concerns remain, Fenaka has not lost sight of its goal to enhance services for Maldivian communities. The company has expanded its services to more islands in the country. Water services were introduced in 21 additional islands, and sewerage services were expanded to four new islands. In the electricity sector, 61 new generators have been installed in 53 islands to improve capacity and reliability.
Modernizing Operations for Sustainability
In addition to expanding services, Fenaka is also focused on modernizing its operations. The company has taken steps to make its services more environmentally sustainable, ensuring that they can meet the growing demands of the population while minimizing environmental impact. A data center has been set up to digitalize the company’s services, streamlining operations and improving customer experiences.
Furthermore, Fenaka has introduced a new online portal for human resources, vendors, and internal ticketing, making it easier to manage operations. The introduction of smart meters is another initiative aimed at improving service efficiency and reducing costs in the long run.
Fenaka’s financial and operational improvements are a testament to the company's determination to overcome its past challenges. While the road to full financial recovery is still long, the steps taken in recent months position the company to continue providing essential services to the Maldivian people while managing its debts responsibly. With ongoing efforts to reduce costs, expand services, and modernize operations, Fenaka is working toward a more stable and sustainable future for the country’s utility services
