Malita Investments plc - Interim Results

Wednesday, August 9th, 2017

On 9 August, Malita Investments plc published its 2017 interim results covering the six months ended 30 June 2017.

Performance Overview

During the period under review, the Company registered a 1.8% increase in revenue to €3.5 million as the Company continues to receive income from its ground rents of Malta International Airport and Valletta Cruise Port as well as income relating to the Parliament Building and Open Air Theatre. The Parliament Building was officially inaugurated in May 2015 and the Company is currently waiting for the completion certificate to be issued. Furthermore, the Company is receiving additional income on the Parliament building following an additional €7 million investment in this property in agreement with the Government of Malta.

Meanwhile, administrative expenses increased by almost 42% to €0.34 million possibly reflecting additional expenses incurred in relation to the Company’s upcoming project in affordable housing.

The Company also reported a decline of €0.17 million in the fair value of the MIA and VCP sites in line with the upward movement in market yields. On the other hand, Malita registered a €7.3 million uplift in the value of the Parliament Building and Open Air Theatre after these properties were revalued at fair value rather than at cost. Since inception, Malita had being valuing the latter two properties at cost pending the issuance of the completion certificate. However, the Directors resolved that both the Parliament Building and Open Air Theatre should be carried at fair value.

As a result, the Company reported an operating profit of €10.32 million representing an 85.7% increase over the corresponding figure for the six months ended 30 June 2016.

Net finance costs amounted to €0.62 million representing a 3.6% drop from the corresponding figure in the first half of 2016.

Overall, Malita Investments plc registered a 97.4% increase in pre-tax profits to €9.69 million. However, after accounting for a tax charge of €8 million (mainly related to deferred tax provisions on the Company’s investment properties) the Company’s net profit for the period under review amounted to €1.68 million, representing a 57.3% decline from the €3.9 million net profit registered in the previous comparable period. This translates into an earnings per share of €0.0113 (H1 2016: €0.0266).

The Statement of Financial Position as at 30 June 2017 compared to the corresponding figures as at 31 December 2016, shows an 8.9% uplift in total assets to €170.35 million largely reflecting the aforementioned uplift in the fair value of the Parliament Building and Open Air Theatre as well as the additional €7 million investment in the Parliament Building. Total liabilities increased by 32.3% to €59.54 million reflecting the €7 million payable to Grand Harbour Regeneration Corporation (GHRC) in connection with the additional investment in the Parliament Building (which will be financed through an additional loan and overdraft which the Company has already secured) as well as the €7.7 million increase in deferred tax liabilities to €13.3 million. Overall, the Company’s equity base contracted by 0.5% to €110.8 million as the profit registered during the period under review was offset by the dividend paid in respect of the 2016 financial year as well as due to the contraction in the fair value gains reserve (in view of the significant increase in deferred tax). This translates into a net asset value per share of €0.748 (Dec 2016: €0.752).

Dividend

The Directors declared a gross interim dividend of €0.0132 per share (net: €0.00858) representing a 3.1% increase over the interim dividend paid in 2016. The interim dividend will be paid on 7 September 2017 to all shareholders as at the close of trading on Wednesday 16 August.

Outlook

The announcement reiterated the fact that on 28 June 2017, the Company entered into two credit facility agreements amounting to €53.7 million (for a 25-year term) with the European Investment Bank and the Council of Europe Development Bank for the purpose of financing the construction of a number of affordable housing units in Malta. However, no further details on this project were divulged.

The Directors also noted that they continue to consider and evaluate other potential projects.

Download

Malita Investments plc – Condensed Interim Financial Statements for the six months ended 30 June 2017.

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