On 30 August 2021, MIDI plc published its condensed interim financial statements covering the six-month period ended 30 June 2021.
During the period under review, MIDI generated €6.63 million in revenues compared to €1.07 million in H1 2020 as the company sold two out of the three apartments within ‘Q2’ for €5.4 million which were part of inventory. In the first half of 2020, no property sales were concluded. On the other hand, income from the ‘Property and Rental Management’ segment increased by 12.2% to just under €1.2 million (H1 2020: €1.07 million) as although MIDI continued supporting the tenants of its commercial properties and its car park operator, the amount of rent concessions was lower when compared to the corresponding period in 2020.
On the expenditure side, operating costs more than doubled to €4.73 million. However, given the sharper increase in revenues, MIDI recorded an operating profit of €1.9 million compared to an operating loss of €0.72 million in H1 2020. Most of the operating profit came from the sale of the two apartments within ‘Q2’ whilst the ‘Property and Rental Management’ segment generated an operating profit of €0.59 million (H1 2020: €0.51 million).
Meanwhile, net finance costs amounted to €1.26 million whilst MIDI also recorded a near €1 million profit from its share in Mid Knight Holdings Limited which is the owner of ‘The Centre’ commercial block.
Overall, MIDI reported a pre-tax profit of €1.63 million compared to a pre-tax loss of €0.88 million in the previous corresponding period. After accounting for a tax charge of €0.67 million, the net profit for the period under review amounted to €0.96 million.
The condensed Statement of Financial Position as at 30 June 2021, when compared to the corresponding figures as at the end of 2020, shows that the amount of net assets grew by 0.9% to €102.8 million which, in turn, translates into a net asset value per share of €0.48. Total borrowings increased marginally to €74.1 million (when including lease liabilities amounting to €14.5 million) whilst total assets remained virtually unchanged at €227.9 million.
In their commentary, the Directors explained that given that MIDI only has one property in its inventory for sale, the projected financial performance for the second half of the year will be inferior when compared to that of the first six months of 2021. As a result, the company is anticipating a subdued financial performance for 2021.
Meanwhile, as the Maltese economy returns to a greater state of normality, MIDI continues to monitor its cash flow projections to assess the pandemic’s lingering effect on its operations. Whilst adopting a prudent approach in its projected cash flow assessments, MIDI expects to have sufficient liquidity and financial resources to meet its obligations and expected cash outflows after also taking into account arrangements with its bankers in respect of new and existing bank facilities.
Update on the Manoel Island Project
MIDI continues to focus on the development of Manoel Island. Although the reduction in the planned development volumes is expected to impact the overall profitability of the project, this impact is mitigated to some extent by provisions in the Deed of Emphyteusis entered with Government on 15 June 2000 which provides for specific remedies in the event that the development is impacted by archaeological findings. As such, MIDI is currently pursuing the matter with Government.
In the meantime, the Environmental Impact Assessment for the reduced Manoel Island Masterplan has been approved by the Enivronmental and Resources Authority. However, this decision is being appealed by an NGO and a Planning Authority public hearing for the revised Masterplan is scheduled for 2 September 2021.
Update on the ‘Q3’ Project
MIDI has also been working on the final development at Tigné Point known as the ‘Q3’ residential block. This development will consist of 63 apartments and underground car parking. A full development permit was granted by the Planning Authority on 16 April 2020 which also includes the landscaping, paving and embellishment of the Garden Battery and adjoining areas. Although this permit is subject to an appeal, MIDI continued with both the design and procurement processes of the development to be in a position to commence works immediately, should the appeal be decided in the company’s favour.