Malta International Airport plc - Full-Year Results

On 20 February 2019, Malta International Airport plc published its Annual Report & Financial Statements for the year ended 31 December 2018.

Performance Overview

During 2018, MIA registered an increase of almost 12% (or €9.82 million) in revenues to a new record of €92.2 million (2017: €82.4 million) on the back of growth in both the ‘Airport’ segment as well as the ‘Retail & Property’ segment. On the aviation side, revenues grew by 11.1% (or €6.53 million) to €65.5 million reflecting the record number of passenger movements of 6.81 million (further details about the 2018 traffic results are available here). In addition, revenues from the ‘Retail & Property’ operations expanded by 14.5% (or €3.34 million) to €26.3 million reflecting growth across all of the company’s non-aviation sector particularly the airport’s retail outlets and the SkyParks Business Centre.

Operating costs also increased, but at a slower pace than revenues. As a result, operating profits improved by 14.3% to €47 million compared to €41.2 million in the previous comparable period. Excluding depreciation and amortisation, MIA generated an EBITDA of €54.4 million representing a growth of just over 12% when compared to the EBITDA figure of €48.6 million for 2017. On the other hand, the EBITDA margin remained unchanged at 59%.

The profitability of MIA was positively impacted by the much lower charge related to financing requirements which, in 2018, amounted to €0.16 million compared to €3.8 million in the previous year. The latter, however, had included a one-time early repayment fee of €2.78 million pertaining to the early settlement of a high fixed interest rate loan. In this respect, the 2018 financial statements also show that the airport operator ended the year with a net cash balance of €20.3 million compared to a net debt position of €5.39 million as at 31 December 2017.

Overall, MIA reported a pre-tax profit of €47.1 million, representing a growth of 25.4% over the previous year’s comparable figure of €37.6 million. After accounting for a tax charge of €16.8 million, MIA’s net profit for the year amounted to a record of €30.3 million (2017: €24.2 million) representing a return on average equity of just over 29%.

The Statement of Financial Position shows a 7.1% drop in total assets to €169.8 million. This is largely attributable to the utilisation of cash balances towards debt reduction. Accordingly, total liabilities also contracted to €57.2 million (-€29.9 million) whilst shareholders’ funds expanded by 17.6% to €112.6 million.

Dividend

The Directors are recommending an increase of 28.6% in the final net dividend distribution to €0.09 per share. Coupled with the interim net dividend of €0.03 per share paid in September 2018, the total dividend for the year amounts to €0.12 per share representing an increase of 20% over the total dividend distribution for 2017 and a payout of 53.4% (2017: 56%). The final net dividend is payable on 29 May 2019 to shareholders as at close of trading on 11 April 2019. The company also noted that the Annual General Meeting is scheduled to be held on 15 May 2019.

Outlook

Looking ahead, the company reiterated that it will undertake investments of over €20 million in 2019 comprising the parking village, improvements to the terminal and airfield infrastructure as well as enhanced security. MIA also noted that it expects to finalise plans for a new multi-million aircraft parking area which will cater for additional airfield capacity for the long term. Furthermore, MIA explained that its plans for SkyParks 2 incorporate the creation of 22,000 sqm of office and commercial space as well as a business hotel.

With respect to the company’s ongoing operations, MIA noted that Europe’s largest low-cost carrier, Ryanair, is expected to add another aircraft (the sixth) to Malta, thus enabling the launch of a significant number of new routes. In addition, Air Malta will be extending new German routes that were originally launched in November 2018 into the 2019 summer schedule. Apart from these, 2019 will also see the introduction of a new airline, Qatar Airways, operating from Doha which, in turn, will primarily serve as a hub for Qatar Airways’ extensive inter-continental route network. Meanwhile, the fast-growing Hungarian low-cost carrier Wizz Air will introduce a new flight from the second largest city in Hungary, Debrecen, and the low-cost airline Volotea will launch two new routes from their Italian bases in Genoa and Verona. An additional weekly turnaround from the TUI cruise ship will operate throughout the summer months and consequently result in an increase in charter traffic from Germany.

On the other hand, MIA also explained that the envisaged growth in traffic will be partially offset by some reductions in capacity and discontinued routes. However, save for any extraordinary or unpredictable events, the company’s outlook for 2019 remains positive as it expects to register yet another record number of passenger movements of 7.2 million (as previously indicated in the 2019 forecasts issued on 17 January 2019).

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Malta International Airport plc – Annual Report & Financial Statements for the year ended 31 December 2018.