Mediterranean Investments Holding plc published its 2011 half-year results on 19 August. The financial statements reveal that during the first six months of the year the Group’s revenue grew by 57% to €5.1 million. The MIH Group achieved an operating profit of €3.2 million (2010: €1.5 million) and after accounting for net finance costs of €3.1 million registered a pre-tax profit of €0.1 million compared to a loss of €0.2 million incurred in the same period of 2010. The Group explained that this turnaround in performance was primarily the result of the income generated from the leasing out of units at Palm City Residences.
The Directors stated that during the first two months of the year, Palm City Residences continued with negotiations to secure more lease contracts. However, due to the turmoil brought about by the unrest in Libya, the increase in contract sign ups was heavily disrupted which adversely impacted the Group’s operational performance.
The Directors also explained that MIH’s wholly owned subsidiary, Palm City Residences, completed its development project of 413 residential units during 2010 with more than 70% of these units being let out. Most of the remaining units have also been reserved for future rentals starting in 2011. Moreover, following the positive response to the Palm City Residences, MIH has embarked on its second development, the Medina Tower, in Tripoli. The Group however stated that the current crisis in Libya has brought about significant disruption to the business environment in the country. The Directors confirmed that Palm City Residences has not suffered any damages to its assets and the Group has continued its operational activities in Libya albeit on a reduced level. At the beginning of the year there were 282 signed contracts out of which 162 contracts have been cancelled to date. Notwithstanding this, management has managed to partially replace contract leases by short-term lets (mostly to the local community).
Moreover, the Directors stated that given the downturn in business, the value of the Group’s property in Libya as at the reporting date, would need to be tested for impairments. However, due to the extremely fluid and volatile situation in the country, the Directors explained that this does not allow a reliable quantification of the anticipated decrease in the value of the property.