On 16 August, Mediterranean Investments Holding plc published its half-year results covering the six months ended 30 June 2012. During the period under review, the Company generated total revenue of €12.3 million compared to the €5.1 million income registered during the first six months of 2011 which was marked by the start of the political conflict in Libya. The strong increase in revenue in the first half of 2012 is as a direct result of the rise in occupancy at Palm City which reached 82% (338 units) as at 30 June 2012. Rental contracts with the various tenants are spread across different terms ranging from one month to five years.
Naturally, the improved revenue figure led to similar significant improvements in operating profit to just over €9 million (June 2011: €3.2 million) notwithstanding the increase in operating and administrative expenses commensurate with the rise in occupancy at the complex.
MIH also incurred a 39.1% increase in finance costs to €4.67 million mainly reflecting the interest paid on a €13.2 million loan provided by the Company’s shareholders in 2011 at an interest rate of 5% per annum. The purpose of the shareholders’ loan was to ease the cash flow shortfall during the Libyan conflict and this funding enabled MIH to continue servicing its bond interest payments as well as payments to Palm City’s capital creditors. In June 2012 the Company obtained the approval from those holders of the 7.15% bonds to apply part of the 2010 bond issue proceeds towards the partial reduction of this loan. As a result, the outstanding loan amount has now been reduced by €8 million to €5.2 million.
The Company’s income statement was also hit by a €0.1 million fair value loss on an interest rate swap. Nonetheless, the Company’s profitability amounted to €4.4 million compared to €119,041 during the first half of 2011.
The half-year report also updates the market on the Company’s next project, the Medina Tower development. During the period under review, MIH invested a further €8.6 million in this project with works on site expected to commence later on this year. Moreover, during July 2012, MIH invested a further €0.5 million in the Medina Towers project thereby raising the Company’s total investment to €13 million (including the initial €3.9 million invested in 2010). The Directors reiterated their view that the project’s business case has increased significantly following the conflict in Libya.
Download a copy of the Mediterranean Investments Holding plc 2012 Half-Year Report