Mediterranean Investments Holding plc - Full-Year Results
On 4 April, Mediterranean Investments Holding plc published the 2013 financial statements.
Performance Overview
During 2013, revenue grew by 13% to €30.9 million as occupancy at Palm City reached an all-time high of 94% with 390 units of the 413 units actually leased out. The Directors’ report also notes that there has been a systematic shift towards long-term leases mainly arising from the reduced presence of NGOs which have typically contracted short to medium term rental agreements. Operating overheads also increased by 14.8% to €7.5 million leading to a record earnings before interest, tax, depreciation and amortisation (EBITDA) figure of €23.4 million representing a 12.5% increase over the previous year’s comparable figure.
Depreciation and amortisation also increased by 18.7% to €0.56 million. On the other hand, the financials of MIH were positively impacted by €0.09 million in other income, €0.05 million in share of profits from associated company (2012: share of loss of €0.28 million) and a fair value gain of €0.25 million on interest swaps (this will be reversed in the future as the Company plans to hold these until maturity).
Net finance costs dropped by 17.5% to €6.8 million on the back of significantly higher interest income as well as lower interest costs in line with the reduction in the Company’s indebtedness. Interest cover (EBITDA/net finance costs) is 2.95 times compared to 2.39 times in 2012.
Overall, MIH reported a pre-tax profit of €16.4 million compared to the 2012 comparable figure of €68.2 million. However, the latter included the €56.8 million positive adjustment on the fair value of the Palm City property. In fact, excluding this item, the 2013 pre-tax profit figure represents a 44% increase over 2012.
After accounting for a tax charge of €2.6 million, the Company’s net profit for 2013 amounted to €13.8 million.
The Statement of Financial Position shows that total assets grew by 1.3% to €350.9 million largely relating to the €8.2 million increase in property, plant and equipment which in turn is namely related to the acquisition, by its subsidiary Palm Waterfront Ltd from Corinthia Palace Hotel Company Limited (CPHCL), of the right to construct a parcel of land in Janzour (Libya) earmarked for the development of residential units, tourism, leisure and restaurant facilities. This was partially offset by the 21.3% reduction in cash balances. Total liabilities also declined by 4.7% to €184.8 million mainly reflecting the €8.2 million reduction in total borrowings to €117 million. Meanwhile, shareholders’ fund grew by 9% to €166.1 million largely reflecting the profit registered during the period under review. Comparing total equity to total debt, MIH’s gearing ratio amounts to 41.3% (2012: 45.1%).
Update: Medina Tower
During 2013, the Medina Tower project was amended with the aim of decreasing costs (without compromising quality) whilst increasing revenues. In this respect, MIH noted that two underground floors have been removed but two floors were added above ground level thereby having a 40-floor tower comprising 238 luxury apartments, 10,400 square metres of retail space, 22,600 square metres of office space and over 8,400 square metres of conference, health and leisure facilities. The project will be complemented by an underground car park of 900 spaces. Additionally, alternative lower cost materials have been identified. MIH also revealed that a term sheet with a syndicate of banks was signed during the first quarter of 2014 in connection with the financing needed for the development of the project. Up to 31 December 2013, MIH had invested a total of €13 million in the Medina Tower project.