On 26 June 2023, AX Real Estate plc published its interim financial results covering the six-month period ended 30 April 2023.
Rental revenues increased by 6.2% to €3.84 million, reflecting higher income from the lease of the company’s various property assets. As at 30 April 2023, all properties available for rent were leased out. AX Real Estate explained that 58.4% of the rental income emanated from its properties within the hospitality segment, 22% from the Simblija Care Home, whilst the remaining portion was derived from the lease of offices (9.9%), residential units (4.2%), and warehouses (5.5%). The revenue generated during the period was exclusively made up of rental income, in contrast to the recognition of a sale of property of €0.73 million in the same period last year, and as a result, total revenues had reached €4.35 million.
Operating expenses (net of other income) amounted to €0.53 million, compared to €1 million in the previous corresponding period, which also included the cost of property sold. As a result, operating profit eased by 1.9% to €3.30 million (2022: €3.37 million) which translates into an operating profit margin of 86.1% (2022: 77.5%).
Meanwhile, net finance costs increased by €17.9% to €1.86 million as the company increased its bank borrowings to finance ongoing projects. After accounting for a tax charge of €0.16 million, AX Real Estate reported a net profit of €1.29 million compared to €1.67 million in the corresponding period last year.
The Statement of Financial Position as at 30 April 2023 compared to 31 October 2022 shows that total assets increased by 2.5% to €294.1 million, largely composed of investment property of €280.2 million. Total liabilities increased by 6.5% to €154.2 million, with total debt amounting to €125.1 million compared to €116.4 million as at 31 October 2023. As a result, total equity stood at €139.9 million (31 October 2022: €142.0 million) which translates to a net asset value per share of €0.5099 (31 October 2022: €0.5177).
The Directors of AX Real Estate declared an unchanged net interim dividend of €0.0125 per share. The dividend is payable on Monday 31 July 2023 to all shareholders as at close of trading on Thursday 13 July 2023.
Current Developments & Outlook
In their commentary, the Directors provided an update on the two major projects. AX ODYCY (formerly the Seashells Resort at Suncrest) in Qawra opened in line with the anticipated timeline in May 2023. The hotel now has 599 rooms, while the lido is still under development and is expected to be finished by July 2023. Meanwhile, works on the Verdala project are progressing steadily. The foundations of the hotel have been completed and the construction of the hotel floors is currently underway.
Looking ahead, AX Real Estate noted that the positive economic recovery in the tourism industry augurs well for the future as the budgeted variable rent is expected to be achievable. The Directors iterated the importance of the launch of the AX ODYCY hotel and highlighted its pivotal role in achieving the projected revenues and return on investment.