AX Group plc - ‘COVID-19’ Market Update

On 13 April 2020, AX Group plc issued an announcement explaining the impact of the ‘COVID-19’ pandemic on its businesses. In this respect, AX noted that its hotel sector has borne the main brunt of the restrictions taken by local authorities. As this segment has historically been the largest of the Group’s various businesses, the suspension of international travel has, and will continue to have, a material impact on the division and the Group. Similarly, the development sector has experienced pressure on income from rental of residential and commercial property which, however, is not deemed material. Moreover, the dividend stream from the Group’s investment in the Valletta Cruise Port has been significantly impacted. On the other hand, the construction sector continues to operate and while some restrictions have impacted efficiency, these constraints are not deemed material. Meanwhile, the care sector has also been impacted but the commercial effects are overall positive.

Against this background, AX Group has taken appropriate measures to mitigate as much as possible the negative effects from the ‘COVID-19’ on its businesses, including strict cost management, changes to work patterns and reduction in working times, a freeze on sub-contracted labour as well as delays in certain capital expenditure projects. These measures are intended to preserve the financial strength of the Group whilst protecting all its stakeholders.

AX concluded by stating that based on its forecasts, it expects to meet its payment obligations to bondholders. Furthermore, the Group will continue to carefully monitor the situation and will make any further announcements should they be warranted at any point in time.