Malta International Airport plc - Extraordinary Board Meeting

On 22 April 2020, Malta International Airport plc announced that during an extraordinary board meeting, the Board of Directors conducted a comprehensive assessment of the impact that the ‘COVID-19’ pandemic will likely have on the business and operations of MIA going forward. In this respect, the company evaluated several scenarios, including mitigating measures to safeguard its financial resources, and decided on the following set of actions:

Final dividend for the 2019 financial year: The Directors re-considered their original recommendation for the payment of a final net dividend of €0.10 per share. In order to preserve cash reserves in a moment of severe curtailment of revenue generation and also maintain the company’s organisational set-up and structures in place for an eventual swift recovery, the Directors withdrew their recommendation for the declaration of a dividend.

Cost-cutting initiatives & liquidity: In an effort to preserve liquidity, MIA is implementing several cost-cutting measures targeting an initial reduction in operating costs of 30%, with further initiatives expected to be taken as the needs arise. In this respect, the Board of Directors including the Chief Executive Officer and the Chief Financial Officer, will take a voluntary 30% reduction in their remuneration. Moreover, the management team has accepted the company’s proposed salary reductions, effective from the 1st of April 2020, which are expected to ease some of the pressure the company is currently facing.

Capital expenditure programme: MIA made drastic adjustments to its original capital expenditure programme for 2020, suspending all non-essential projects with immediate effect. The company has also shifted its focus to the completion of major projects, namely the construction of the new multi-storey car park and the expansion of the cargo village, works on which were already at an advanced stage before the ‘COVID-19’ pandemic started. Going forward, MIA will continue to carry out projects and works that are essential to the maintenance of its assets, most notably the airfield infrastructure.

2020 forecasts: MIA also referred to the market guidance issued on 29 January 2020 which did not include the impact of the ‘COVID-19’ on the company’s business. Accordingly, and view of the completely different situation currently being faced, MIA explained that it does not have sufficiently reliable data to be able to provide dependable forecasts that can give accurate guidance to the market on the same basis as that given in January 2020. However, having conducted an assessment of the situation, the Directors have reason to believe that with the measures taken so far, and others which are planned to be taken should the need arise, MIA is sufficiently resilient to be able to sustain the current conditions and that, during the current financial year, it has sufficient resources to meet all financial obligations.

Annual General Meeting: MIA noted that it is maintaining the date of the AGM unchanged. The AGM is scheduled to be held on 29 July 2020.

Commenting on the overall situation, MIA’s CEO Mr Alan Borg said that “we are confident that the measures announced today will enable us to manage the overall situation and our cash flows in a manner that puts us in a position to meet all the company’s financial obligations during the current financial year. This unprecedented situation has dealt the aviation industry, not least Malta International Airport, a huge blow that we can only recover from if we continue to take timely measures, even if they may appear to be drastic or unpopular.”

Mr Borg added that: “I would like to appeal to our shareholders for their support and understanding at this time of uncertainty that has forced us to resort to measures that we never thought we would have to take. I would also like to thank the team at Malta International Airport and all other airport stakeholders for being nimble in adapting to the extraordinary needs of the company brought about by the ‘COVID-19’ crisis, and appeal for their continued cooperation as we look ahead to better days.”

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