On 31 August, MIDI plc published its interim financial statements covering the six months ended 30 June 2016.
During the period under review, the MIDI Group registered a 41% drop in turnover to €3.91 million solely reflecting the lower revenue from the sale of property which in the first half of 2016 amounted to €2.48 million comprising the last apartment delivered within the Q1 residential block. On the other hand, during the first half of 2015, revenue from the sale of property amounted to €5.88 million when the Company started delivering the apartments within Q1. Meanwhile, the ‘property & rental management’ segment reported a turnover of €1.43 million compared to €0.76 million in the first half of 2015 reflecting the consolidation of Solutions & Infrastructure Service Limited (SIS) which became a fully owned subsidiary as from September 2015.
Given the lower number of deeds of sale concluded during the period under review, cost of sales also dropped by 52.2% to €2.4 million leading to a gross profit of €1.52 million representing a 6.3% drop from the previous comparable period.
Meanwhile, administrative expenses increased by 60.1% to €1.05 million following the consolidation of the now fully-owned subsidiary, SIS. As a result, the Group’s operating profit amounted to €0.47 million compared to €0.96 million in the first six months of 2015.
After accounting for a relatively unchanged net finance costs figure of €1.6 million, the Group registered a pre-tax loss of €1.4 million during the period under review, compared to a pre-tax loss of €0.64 million in the first half of 2016.
The Group reported a tax credit of €0.28 million compared to a tax credit of €3.86 million in the first half of 2015. However, the latter largely included a one-off tax credit related to changes in the tax rules on the transfers of immovable property as enacted by the 2015 budget measures.
Overall, the MIDI Group incurred a net loss of €0.86 million compared to a net profit of €3.2 million in the first six months of 2015. This translates into a negative earnings per share of €0.004 (H1 2015: €0.015).
The Statement of Financial Position as at 30 June 2016 shows a 3.9% increase in total assets to €194.7 million compared to the corresponding figures as at 31 December 2015. The growth in assets is largely due to the 2.9% increase in Inventories (development project) to €118.5 million and a 23.9% increase in other current assets to €17.97 million. Similarly, total liabilities increased by 8.3% to €125.9 million mainly due to the 8.5% increase in total borrowings to €54.3 million. Overall, the Group’s equity base contracted by 3.4% to €68.9 million largely reflecting the loss registered during the period under review as well as the €1.5 million dividend paid in respect of the 2015 financial year. This translates into a net asset value of €0.322 (Dec 2015: 0.33).
The Directors explained that the civil works on the Q2 residential blocks have been completed and finishing works are expected to be completed during the first half of 2018 at which time the deeds of sale will be published and the profits registered in line with international accounting standards. In this respect, the announcement also noted that during the period under review, approximately half of the Q2 apartments were launched with most now being subject to a promise of sale agreement. Meanwhile, the remaining apartments are expected to be launched prior to completion of works.
Civil works on the business centre, of which MIDI owns 50%, is on scheduled for completion by the end of this year. As such, the business centre is still expected to open for business in 2017. Advanced discussions are currently ongoing with a number of parties for the rental of office space. Furthermore, the announcement reiterated that one floor is already subject to a promise of sale.
With respect to the Manoel Island project, MIDI noted that it has engaged Foster + Partners (a world renowned architectural firm) to draw up a conceptual masterplan for this project.
The announcement also made reference to successful issuance of a new €50 million 4% secured bond maturing in 2026 after the reporting date. The Directors confirmed the Company’s intention to redeem the circa €9.2 million worth of the outstanding 7% bonds which were not exchanged for the new bond on the first early redemption date, being 15 December 2016.
In conclusion, the Directors stated that they expect the MIDI Group to register an overall loss for the current financial year ending 31 December 2016.