Malta International Airport plc - Full-Year Results Review

Malta International Airport plc published its 2008 full-year results following a Board of Directors’ meeting held on 12 March. The Directors declared a final gross dividend of €0.08769 per share (net: €0.057) payable to those shareholders as at close of trading on 5 May 2009. In addition to the interim gross dividend of €0.09231 per share (net: €0.06), MIA’s 2008 total gross dividend amounts to €0.18 (net: €0.117), marginally higher than last year’s dividend.

During 2008, MIA’s total operating income grew by 1.7% to €45.1 million as total passenger movements increased by 4.7% to a record level of 3.11 million passengers despite a severe downturn in the last quarter of 2008. Meanwhile aircraft movements dropped 1% to 27,070 aircrafts during the year, reflecting a higher load factor than in the previous year.
MIA registered an 8% increase in passengers during the first nine months of 2008 following strong increases in January (+23%) and February (+19%) and a 10.6% growth in the second quarter. During the peak months of July and August, passenger traffic edged higher to record levels, however the start of the global financial crises in mid-September strongly dented passenger numbers. During the final three months of the year, the airport registered a 6.5% decline in passengers.

The major component of operating income, regulated fees, which is mainly composed of the passenger service charge, rose by 0.8% during the year to €31.3 million despite the tariff rebates given as incentive schemes on new routes. Regulated fees may be revised with effect from 1 April 2009 by the Airport Charges and Regulatory Board. MIA also reported a 3.7% increase in commercial fees to €9.1 million following the commencement in December of the 6-year agreement with Nuance Group. The Group’s total income was also positively impacted by a 4.2% increase in recharges and other income mainly due to higher car park fees. MIA’s fully-owned subsidiary, Sky Parks Limited, took over the operations of the car park with effect from 1 March 2008. This revenue stream is expected to increase in the future as one of MIA’s projects for 2009 includes the construction of a new car park with a capacity of 520 spaces. Moreover, as from 1 July 2008, MIA generated some revenue from the introduction of the Persons with Reduced Mobility (PRM) fee in order to recoup the charge imposed by the ground-handlers.

Operating costs increased by 4.2% to €29.7 million due to substantial increases in certain cost items which outweighed savings in the use of utilities and administration costs. The Group incurred higher staff costs following the signing of a new 6-year collective agreement and also saw an increase in maintenance costs. The largest increase resulted from the new PRM charge introduced in July 2008. MIA reported that it paid over €0.77 million in PRM charges to ground handlers during the second half of the year but only managed to recuperate a portion of this expense during the period. MIA stated that the Company will seek to increase the PRM fees in 2009 to limit losses arising from this charge from ground-handlers.

The Group registered a marginal decline in earnings before interest, tax, depreciation and amortisation (EBIDTA) to €20.3 million with the EBIDTA margin easing to 45% compared to 45.8% in 2007. Deprecation rose by 9.8% to €4.92 million from €4.48 million in 2007 mainly due to the investment in additional plant and equipment as part of the extension of the terminal building, the resurfacing of the main runway and the construction of new taxiways.

Operating profit amounted to €15.4 million, 2.9% lower than the 2007 figure. The Group incurred €2.35 million in finance costs, 3.3% higher than the interest paid in 2007 as the increase in debt offset the interest savings gained from a decline in interest rates during the latter part of the year. MIA registered a profit before tax of €13.7 million during 2008, 2.9% lower than the pre-tax profit figure of the previous year. Taxation amounted to €5.02 million (representing a marginal tax rate of 36.7%) resulting in a profit after tax of €8.7 million. Earnings per share also declined by 2.9% to €0.1281.

The December 2008 balance sheet shows total assets of €122.8 million (+2%) with shareholders’ funds increasing by 1.3% to €52.4 million. The decline in profitability resulted in a lower return on equity of 16.6% and a similar decline in return on assets to 11.3%. The Group’s gearing ratio jumped to 91% from 70.9% in 2007 as the current investment programme was financed through a combination of increased bank borrowings as well as the company’s cash flow. MIA’s debt increased by 12.9% to €52.2 million while the company’s cash balance dropped to €4.5 million from €9.6 million at the end of 2007.

Comments are closed.