MIDI plc - Updated Financial Analysis Summary
On 23 June 2020, MIDI plc published an updated Financial Analysis Summary (“FAS”) providing an overview of the 2019 financial results, a comparison of the 2019 actual results with the forecasts as published in the previous FAS dated 21 June 2019, as well as the forecasts for the current financial year ending 31 December 2020.
The main highlights of the forecasted financial performance for 2020 are as follows:
- Revenues are expected to amount to €2.18 million compared to €27.7 million generated in the 2019 financial year reflecting the assumption that no sales of property units will be registered during the year. Indeed, given the success in property sales recorded by MIDI in 2018 and 2019, the company has a stock of only three units which are now available for sale. Moreover, the expected revenue figure for the 2020 financial year includes lower expected rental income (-36.6%) reflecting the negative impact from ‘COVID-19’ on the ongoing operations of the company.
- Given the significant reduction in business activity, EBITDA is anticipated to amount to a negative €1.64 million compared to a positive EBITDA of €12.1 million in the 2019 financial year.
- The share of profits from MIDI’s investment in ‘The Centre’ office block (through the 50%-stake in Mid Knight Holdings Limited) is forecasted to increase by more than 40% to €2.3 million reflecting incremental increases in lease rates as well as the rationalisation of costs.
- MIDI is expected to post a loss after tax of €1.97 million compared to a net profit of €8.22 million recorded in the 2019 financial year.
With respect to the expected financial position of MIDI as at 31 December 2020, bank borrowings and bonds are anticipated to remain unchanged at €59.4 million. On the other hand, the company’s cash balances are expected to drop by €15 million to €6.9 million compared to €21.9 million as at the end of 2019 reflecting the increase of €8.41 million in inventories (mostly related to the Manoel Island project) as well as the reduction of €4.49 million in trade and other payables to €13.6 million. Meanwhile, the company’s equity base is expected by contract by 1.9% to just under €102 million which, in turn, translates into a net asset value per share of €0.476 compared to €0.485 as at 31 December 2019.
The Q3 Block
In mid-April 2020, the Planning Authority (“PA”) granted MIDI a full development permit related to the construction and completion of the ‘Q3’ block which, however, is subject to an appeal. The development will comprise 63 apartments spread over 17 floors, four levels of car parking, as well as the embellishment of the Garden Battery and adjoining areas. The FAS explains that construction works are expected to commence in early 2021 and that the residential units will be available for delivery between 2024 and 2025.
The Manoel Island Project
MIDI’s masterplan for Manoel Island envisages the development of a low-rise marina village, extensive underground car parking facilities, the creation of an 80,000 sqm of public park spaces, as well as the restoration of a number of historical buildings including the ‘Lazzaretto’ which will also be converted into a five-star hotel including serviced apartments.
The Outline Development Permit was approved by the PA on 20 March 2019 providing for a gross developable area of approximately 127,000 sq. However, more recently on 17 June 2020, the Environment & Planning Review Tribunal (“EPRT”) concluded that there was a breach in the Environment Impact Assessment (“EIA”) and that a fresh EIA must be submitted by MIDI to the Environment Resources Authority (“ERA”) in order for the PA to reconsider the application. In this context, on 18 June 2020 MIDI reiterated that it remains fully committed to the Manoel Island project and the development of the site as contemplated in the deed of emphyteusis entered into with the Government of Malta on 15 June 2000.