Malta International Airport plc - Full-Year Results & Final Dividend

The Board of Directors of Malta International Airport plc met on 1 June to discuss and approve the financial statements for the year ended 31 March 2006 and proposed a gross final dividend of 3c38 per share for approval by the shareholders at the Annual General Meeting to be held on 13 July 2006. Those shareholders as at close of business on 18 July for settlement on 21 July 2006 will be entitled to this dividend, which is expected to be paid by 31 August 2006.

During the year ended 31 March 2006, MIA’s total operating income at Lm16.7 million was only marginally higher than the previous year’s figure despite a drop in passenger departures and lower revenue from the retail outlets. This rise is therefore attributable to the increase in the aeronautical charges during the financial year being reviewed. These have since increased further from the start of the financial year on 1 April 2006. In the review of performance within the preliminary statement of results, the Directors attribute the drop in passenger volumes to three main factors:

(i) the absence of passenger traffic coming from the cruise business during summer 2005 compared to the previous year;
(ii) the weak performance of the tourism industry and
(iii) a reduction in travel from local residents as a result of an increase in taxation on air travel.

Operating costs excluding the charge for depreciation increased by 3.5% to Lm9.4 million mainly as a result of the significant rise in utility charges and also a rise in staff costs in line with agreed collective agreements with the unions. The Directors explained that during the year the Company maintained a tight control over its key operating costs. The charge for depreciation dipped by 2% to Lm1.6 million.

The marginal rise in income and the increase in operating costs resulted in the Company’s operating profit decreasing by 3% during the year to Lm5.7 million. The operating profit margin stood at 34.4%, down from 35.7% the previous year. Interest payable increased slightly to Lm1.04 million. MIA generated a pre-tax profit of Lm4.9 million during the year ended 31 March 2006, 4.6% lower than that recorded during the comparative period. After deducting the tax charge, profitability attributable to shareholders amounted to Lm3.08 million, a 4.5% drop from the March 2005 profit of Lm3.2 million. The earnings per share is 4c55 (March 2005: 4c76).

The gross dividend of 3c38 is identical to the final dividend distributed last year. Coupled with the interim dividend paid in December of 3c85 per share, the total dividends for the March 2006 financial year-end have remained unchanged at 7c23. The drop in profitability increased the payout ratio to 103.3%.

The Company’s assets as at the end of March 2006 amounted to just over Lm50 million with shareholders’ funds edging 0.4% lower to Lm21.6 million. Based on the total number of shares in issue of 67,650,000, MIA’s net asset value per share stands at Lm0.319.

In the Review of Performance, the Directors explained that despite the difficult year during which passenger throughput decreased and costs increased, the Company continued to pursue its long-term strategic objectives.

During the year MIA took an active part in promoting travel to Malta especially the Company continued to pursue its long-term strategy to take active part in promoting travel to Malta especially from underserved destinations and together with Government agreed on an incentive scheme open to all airlines for specific European routes. Meanwhile, the Company has also continued with its efforts to encourage carriers and the local air freight community stakeholders to explore the possibility of using the Airport as an air cargo hub. The Directors noted that discussions are in hand to enlarge the cargo facilities areas opened last year and they feel that there are good prospects that the development of cargo and courier services in and out of Malta will pick up in the coming years.

With regards to the cruise and fly business, MIA, in association with VISET Malta p.l.c., participated once again in various promotional activities and a cruise liner is expected to be operating out of Malta for most of summer 2006 with good prospects that it will continue operation also for autumn 2006. The Company also noted that there is also the possibility of a second ship operating also out of Malta next year.

On the retail side, the Company explained that following the increased terminal space required by the Schengen Agreement, MIA will have an opportunity to enhance and enlarge the shopping facilities, which should help in offsetting the drop in sales registered in alcohol and tobacco products.

MIA is continuing with its efforts to develop the land opposite the Air Terminal and reported that it is currently seeking prospective investors to develop the Mediterranean Business Park. The Company stated that it is increasing its efforts to seek to conclude a deal or separate deals with one or more interested parties in the best interest of the Company, which is viable to the prospective investor but at the same time, which also adds value to the core business of MIA.

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