Malta International Airport plc - Full-Year Results
On 24 February 2021, Malta International Airport plc published its Annual Report & Financial Statements for the year ended 31 December 2020.
Performance Overview
During 2020, as a direct consequence to the coronavirus pandemic, MIA suffered a drop of 76.1% in passenger traffic which led the company to register its worst traffic result since the airport’s privatisation in 2002. As a result, MIA reported that revenue had decreased by €68 million (-67.9%) when compared to 2019, with revenue generated from its aviation segment declining by 74.8% whilst revenue from its non-aviation segment (including rents, parking and VIP products) fell by 51.4%.
In a bid to mitigate the negative effects of the pandemic and contain costs, MIA reduced operating costs by 21.2% to €36.2 million which was primarily derived from a €8.3 million (-31.8%) decline in operating expenses as well as savings in staff costs which dropped by €2.2 million (-20.2%) due to the temporary salary reductions between April and July 2020 and the Covid Wage Supplement scheme. Nonetheless, EBITDA contracted sharply by 91.1% to just €5.6 million in 2020 with the EBITDA margin dropping by 45.6 percentage points from 63.0% in 2019 to 17.4% in 2020.
Meanwhile, finance costs related to lease interest registered a marginal increase to €2.09 million whilst on the other hand, the company recorded a marginal investment income on term deposits of €0.03 million and a positive release of deferred income arising on the sale of terminal buildings and fixtures amounting to €0.28 million.
Overall, the airport operator reported a pre-tax loss of €5.8 million when compared to a pre-tax profit of €52.6 million in 2019. After accounting for a tax credit of €1.5 million, MIA’s net loss for the year amounted to €4.3 million when compared to a record profit after tax of €33.9 million in 2019.
The Statement of Financial Position shows a 1.3% decline in total assets to €235 million as the €7.3 million rise in property, plant and equipment was outweighed by the €10.2 million decrease in trade and other receivables. Meanwhile, total liabilities rose by 1.1% to €110.2 million largely reflecting the minor rises in lease liabilities and trade and other payables which outweighed the declines in deferred income and current tax liabilities. Overall, MIA’s total equity base contracted by 3.3% to €124.8 million.
Dividend
The Directors are not recommending a dividend payment for the financial year 2020 given the performance in 2020 and the limited visibility of the way ahead. The Directors have taken the prudent decision in order to manage the company’s cash reserves in a moment of severe curtailment of revenue generation and in order to maintain its organisational set-up and structures in a state which would allow it to recover immediately once the situation normalises. The company also noted that the Annual General Meeting is scheduled to be held on Wednesday 5 May 2021.
Outlook
MIA’s CEO Alan Borg explained that the company’s excellent track record in the years leading up to 2020 had furnished MIA with the resilience to face 2020’s unprecedented challenges. Looking ahead, it was noted that significant uncertainty and low consumer confidence continue to dominate the aviation environment, necessitating an extremely cautious approach to cash management in order to bolster the company’s ability to withstand further shocks whilst also safeguarding the long-term interests of all stakeholders. Mr Borg highlighted that the return to pre-Covid levels will be characterised by gradual strategic investments and sustainable network developments as well as positioning the company in a way whereby it can swing into action as soon as air travel shows signs of a recovery.
During 2021, the company will retain its focus on projects and works that are essential to the maintenance of the company’s assets, investing mainly in the airfield infrastructure, IT projects and the completion of the fire truck replacement programme. The company will also forge ahead with strategic projects, including the relocation of the existing fuel station, the completion of the Cargo Village and the embellishment of the food court, with a total investment of around €4 million in 2021. Additionally over the coming year, the company will continue to lay out the groundwork for long-term investments, including the new business center and hotel project SkyParks 2 and the construction of a new parking stand (‘Apron X’) and supporting facilities.