Malta International Airport plc - Full-Year Results

On 25 February, Malta International Airport plc (MIA) published its annual financial statements for the year ended 31 December 2014.

Performance Overview

During the year under review, MIA registered a 9.4% increase in revenue to a record €64.29 million on the back of growth in both the ‘Airport’ segment as well as the ‘Retail and Property’ segment. On the aviation side, revenues grew by 8.1% to €44.65 million reflecting the record number of passenger movements of 4.29 million. This growth in passenger numbers did not only lead to an increase in aviation-related revenues but also to an increase in retail sales (forming part of the ‘Retail and Property’ segment) across the concessionaires throughout the terminal. Furthermore, the ‘Retail and Property’ segment also benefitted from the positive performance of other business activities, namely the €2.6 million in rental revenues generated from the SkyParks Business Centre which has exceeded expectations. It is noteworthy to highlight that in view of the growth achieved in the ‘Retail and Property’ segment, in line with the strategy and investments of the Company in recent years, the ‘Airport’ segment is now contributing less than 70% to the Group’s total revenue whilst the ‘Retail and Property’ segment now accounts for 29.7% of total revenue.

Operating costs only increased by 5.4% to €30.4 million. This lead to a 13.2% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to a record €33.8 million. The EBITDA margin also climbed to a new all-time high of 52.6%.

The depreciation charge increased by 17% to €6.5 million largely due to the further investment undertaken in the airport’s infrastructure. On the other hand, net finance costs dropped by 21% to €1.45 million due to a combination of higher interest received, reduced debt levels and lower interest charged on outstanding bank loans.

Overall, MIA reported a record pre-tax profit of €26.1 million representing a 15% rise over the previous year’s comparable figure. After accounting for a tax charge of €9.2 million (2013: €8.1 million), MIA’s net profit amounted to €16.8 million representing a 15.4% increase over the previous year’s figure and a new all-time high.

The Statement of Financial Position shows a 2.2% increase in total assets to €165.7 million largely due to the 19.8% increase in trade receivables to €14.28 million and the additional 5.3% growth in cash balances to €30.72 million. On the other hand, total liabilities dropped by 3.2% to €92.1 million which mainly reflect the €2.4 million net repayment of bank loans during the year under review. Given the growth in assets and reduction in liabilities, the Group’s total equity grew by 9.9% to €73.62 million which translates into a net asset value per share of €0.544 (2013: €0.495).  The post-tax return on equity for 2014 reached 23.9% compared to 22.6% in 2013. Similarly, the return on assets increased by 157 basis points to 15.9%.

Dividend

The Directors recommended a final gross dividend of €0.1231 per share representing a 77.8% increase over the final gross dividend paid out in respect of the previous financial year. Shareholders as at the close of trading on 16 April 2015 will be eligible to receive this dividend by not later than 8 June 2015 subject to shareholder approval at the upcoming Annual General Meeting scheduled to be held on 20 May 2015.

Combining the interim dividend of €0.0462 (paid out in September 2014) with the above mentioned final gross dividend, the total dividend declared in respect of the 2014 financial year amounts to a record €0.1693 per share (net: €0.11), an increase of 46.6% compared to the dividend distribution in respect of 2013.

Outlook

Looking ahead, the Directors noted that they are still optimistic despite the prevailing risks in today’s global environment. In line with the outlook of the International Air Transport Association (IATA) and Airports Council International (ACI), the Directors expect that whilst the drop in the price of oil will contribute further towards passenger growth, the positive outlook of the aviation industry may be disrupted by political unrest and conflicts as well as some weak regional economies.

As previously announced, the Directors are forecasting a further 2% growth in passenger movements during 2015 on the back of an increase in seat capacity and unchanged seat load factor of 79.7%. The anticipated growth in seat capacity is based on the expectation that Air Malta, MIA’s largest client, will maintain seat capacity deployment at the same levels of 2014 as it focuses its schedule on routes to the main hubs. Additionally, MIA is expected to welcome four new airlines in 2015, namely Finnair (Helsinki), Jet2.com (five routes), SwissAir (Zurich) and Aegean (Athens). Furthermore, a number of airlines already operating routes to and from Malta will also deploy additional seat capacity (Turkish Airlines, NIKI and Brussels Airlines). Additionally, passenger growth is also expected to be enhanced through the Cruise & Fly operation of TUI Cruises which shall commence in April 2015, two months earlier than in 2014.

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Malta International Airport plc – Financial Statements for the year ended 31 December 2014