Malta International Airport plc - Interim Results

On 7 August, Malta International Airport plc (MIA) published its interim financial statements covering the six months ended 30 June 2013. The announcement indicated that the first half figures generally represent around 48% of the total annual revenue and earnings for the company.

Performance Overview

During the first six months of 2013, MIA generated a record €25.16 million in revenue on the back of growth achieved in both the airport segment as well as the retail and property area. Income from the airport segment increased by 7.5% to €17.56 million mainly due to the 9.2% increase in passenger numbers during the period to 1.73 million passengers. The retail and property segment registered a 21% increase in its revenue to €7.42 million mainly reflecting the new rental income from Sky Parks as well as growth in revenue from the car park. The retail and property segment now accounts for 29.5% (June 2012: 27%) of the Group’s revenue whilst the contribution from the airport segment is down to 69.8% (June 2012: 71.9%).

MIA incurred €3.9 million in staff costs representing a 6.2% increase over the comparable period due to wage increases as per the collective agreements and a staff early retirement scheme carried out in the first quarter of 2013. Similarly, operating costs increased by 4.7% to €9.8 million reflecting the additional commercial activity generated by the SkyParks Business Centre which was inaugurated in September 2012.

Overall, the Group registered an 18.4% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to a record €11.46 million with the EBITDA margin also improving from 42.6% in the first half of 2012 to 45.6% during the period under review.

The depreciation charge increased by 13.8% to €2.6 million reflecting the additional depreciation incurred in the SkyParks Business Centre. After also accounting for a higher net interest expense of €0.97 million (June 2012: €0.5 million), reflecting the increased level of debt funding to finance the SkyParks Business Centre, the Group’s pre-tax profit amounted to just over €8 million representing a 14.1% increase over the comparable figure in the first six months of 2012.

MIA incurred a tax expense of €2.9 million representing a marginal tax rate of 36.4%. As a result, MIA registered a record net profit of €5.1 million representing a 14.2% increase over the profitability registered during the first half of last year. This translates into an earnings per share of €0.0378 (June 2012: €0.0331).

The balance sheet shows a 2% increase in total assets to €157.3 million compared to the figures as at 31 December 2012 mainly due to the additional investments at SkyParks as well as an increase in trade receivables (€19.1 million) and cash balances which have now reached €18.3 million. Total liabilities have also increased by 3.7% to €92.3 million mainly due to a €4.5 million rise in trade payables to €21.5 million. Meanwhile, total equity remained relatively unchanged at just over €62 million.

SkyParks Business Centre

The Business Centre was inaugurated in September 2012 and up to 30 June 2013 the total cost amounted to €17.2 million. MIA estimates that it requires a further €2 million to complete the building to the internal fit-out standards contracted by prospective tenants. This process should be completed by the end of 2013.

The announcement also noted that 90% of the available space at SkyParks is covered by lease agreements, some of which have not yet commenced.

Dividend

For the sixth consecutive year, the Directors declared an unchanged interim dividend of €0.0462 (net: €0.03) per share in spite of the increased profitability over the years. In fact, the payout ratio dropped to 79.4% from 90.7% in the first half of 2012. Shareholders as at the close of trading on Tuesday 13 August will be entitled to this dividend which will be paid by not later than 23 September 2013.

Revised Passenger Growth Forecast

The 9.2% increase in passenger movements during the first half of the year exceeded the company’s expectations mainly due to the additional capacity brought on by the introduction of five new carries as well as by the strong seat load factors from all carriers. On this basis, MIA is revising its 2013 growth forecast from the initial 1.5% to 6.7% which translates into a record 3.89 million passenger movements.

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Malta International Airport plc – Interim report for the six months ended 30 June 2013.