Malta International Airport plc - Full-Year Results

On 28 February 2024, Malta International Airport plc published its Annual Report & Financial Statements for the year ended 31 December 2023.

Performance Overview

Total revenue surged by 36.6% to a record of €120.2 million compared to €88.0 million in 2022, mostly driven by an increase in aviation-related revenues following the record level of passenger movements. Revenue generated by MIA during 2023 exceeded the previous record of €100.2 million (achieved in 2019) by 20% as the airport welcomed 7.80 million passengers in 2023 compared to 7.31 million in 2019 (pre-COVID). The ‘Airport’ segment generated revenues of €82.4 million in 2023 (2022: €58.3 million, 2019: €70.8 million) representing 68.5% of total revenues. Meanwhile, the ’Retail & Property’ segment generated over €37.6 million in revenue (2022 €29.5 million, 2019: €29.1 million).

Operating costs increased by 29.3% to €57.6 million (2022: €44.5 million) given the growth in the number of employees as well as the higher variable costs resulting from the greater passenger volumes. As a result, the airport operator generated its highest-ever operating profit of €62.7 million (2022: €43.5 million, 2019: €54.4 million). Excluding depreciation and amortisation charges of €12.6 million, EBITDA amounted to €75.2 million, which is 37.0% greater than the EBITDA figure of €54.9 million recorded in 2022 and 19.1% above the €63.2 million generated in 2019. The EBITDA margin of 62.6% is in line with the corresponding margins of 62.4% in 2022 and 63.0% in 2019.

After accounting for finance costs amounting to €2.17 million and investment income of €1.48 million, MIA reported a pre-tax profit of €62.2 million (2022: €41.8 million, 2019: €52.6 million). Following a tax charge of €21.9 million, MIA reported a record net profit of €40.3 million which exceeds the previous record of €38.9 million generated in 2022. The 2022 financial performance was boosted by a €12 million tax credit awarded to MIA for the losses suffered during the COVID-19 pandemic.

The Statement of Financial Position shows that total assets increased by 15.9.% to €330.6 million. Property, plant and equipment surged to €202.1 million from €170.1 million in 2022. Furthermore, cash and cash equivalents including short-term investment securities increased by 11.1% to €76.4 million compared to €68.7 million as at the end of 2022. Meanwhile, total liabilities increased by 22.3% to €139.8 million as the Group remained without any borrowings and also ended the 2022 financial year in a net cash position of €22.0 million even when including €54.4 million in lease liabilities. As a result, shareholders’ funds grew by 11.7% to €190.9 million giving a return on equity amounted to 22.3%.

Dividend

The Board of Directors is recommending a final net dividend of €0.12 per share to be paid by not later than Friday 31 May 2024 to all shareholders as at the close of trading on Thursday 11 April 2024. The final dividend was unchanged from last year and coupled with the net interim dividend of €0.03 paid in September 2023, the total net dividend attributable to the 2023 financial year amounts to €0.15 per share (2022: €0.12) which amounts to a payout ratio of 50.4% (2022: 60% when excluding tax credit).

Infrastructural Investments

The Directors’ Report highlighted MIA has a capital expenditure plan worth around €44.3 million in 2023. The expenditure includes the relocation of the fuel station to pave the way for the SkyParks 2 development, phase 3 of the cargo village project, resurfacing of the airport’s secondary runway and the Apron X project. During 2023, the Group initiated the €250 million 6-year investment programme aimed at transforming the airport campus and laying the groundwork for the terminal expansion.

Outlook

The Directors explained that the outlook for this year is positive as several airlines are planning to continue to deliver growth mainly through an increase in the number of weekly flights on existing routes. Moreover, the gaps in two of the airport’s core markets, the United Kingdom and Germany, are being addressed with several airlines deploying additional seat capacity to both destinations. Furthermore, a new national carrier KM Malta Airlines will be replacing Air Malta. The new airline will launch operations in April 2024 with the same number of aircraft and capacity which will be deployed to primary airports in Europe.

The Directors commented that the industry continues to navigate a challenging landscape characterised by geo-political instability, aircraft shortages, slot constraints and industrial action. As pent-up demand is also expected to level off, the record levels of seat occupancy on flights are unlikely to continue their upward trend. Nevertheless, their outlook for 2024 is still optimistic albeit mindful of the risks involved. Whilst they are forecasting an increase in seat capacity, a dip in seat load factor is anticipated, to achieve an overall 2.5% increase in passenger numbers over 2023 to more than 8 million passengers in 2024.