Audit report notes serious concerns regarding financial stability of Addu International Airport

The Auditor General’s Office has raised serious concerns regarding the financial stability of Addu International Airport Private Limited, according to a report released on the company’s 2025 financial statements.

In the report signed and released by Auditor General Hussain Niyazy, it was stated that the company's financial statements do not reflect its true financial position. Consequently, the Auditor General issued an "adverse opinion" on the accounts. This represents the most severe audit opinion possible, issued when financial statements are deemed unreliable due to significant discrepancies and issues.

One of the most significant issues highlighted in the report is the company's failure to conduct an impairment assessment to determine whether the value of the assets and resources used for airport operations has depreciated. Although the financial records value the company's assets at MVR 449.6 million as of the end of 2025, the audit report suggests that the actual value is likely much lower due to the company's continuous financial losses. By the end of 2025, the company had incurred a substantial total loss of MVR 817.4 million, resulting in a negative net asset value of MVR 58.2 million.

The audit has also revealed that the company failed to include essential information regarding employee benefits in its financial statements, in violation of established regulations. The report further noted that payments due to departing employees and those entitled under the redundancy policy were not calculated in accordance with international accounting standards. Consequently, the full impact of these omissions on the company's financial statements could not be determined.

Furthermore, the auditor highlighted that the ongoing development works at Gan International Airport, conducted under the agreement with the government, have not been recorded as "capital work-in-progress" in the financial accounts.

In terms of financial performance, Addu Airport generated MVR 94.3 million in revenue in 2025. This marks a significant increase compared to the MVR 33 million recorded in 2024. However, as operating expenses surged from MVR 54.9 million to MVR 112.6 million, the company concluded the year with a net loss of MVR 68.7 million. The most substantial expenditure was attributed to the procurement of jet fuel, which alone accounted for MVR 66.6 million.

Regarding the company's debt profile, total liabilities have surged significantly, including outstanding loans to the Bank of Maldives and arrears owed to the government and other third parties. By the end of 2025, the company's current liabilities—debts due within a year—are projected to exceed its current assets by MVR 312.7 million. While the audit report notes that this financial position raises concerns about the company's ability to continue as a going concern, management maintains that operations can be sustained based on assurances provided by the shareholders.

The audit report further noted that while the company’s share capital currently stands at MVR 664.1 million, efforts are underway to convert an additional MVR 95 million provided by the government into equity. To strengthen corporate governance, the Auditor General has instructed the company to align its financial statements with international standards and expedite the valuation of its assets.

While the government maintains a 70 percent stake in Addu Airport, the remaining 30 percent is held by Kasa Holdings.