IHI reports improvement in operating profit

The MSE Equity Price Index recovered some of yesterday’s losses as it rebounded by 0.63% to 3,766.578 points, reflecting the uplift in five equities. Meanwhile, two other equities closed unchanged as today’s trading activity in local equities amounted to €0.18 million. Download today’s Equity Market Summary.

Today, International Hotel Investments plc published its Annual Report and Financial Statements for the year ended 31 December 2023. Revenue surged by 20.8% to a record €287.8 million while EBITDA increased by 16.7% to €60.3 million. The operating profit climbed to €36.5 million compared to €14.3 million in the previous year. However, net finance costs excluding exchange rate differences rose by 35.2% to €37.5 million. Overall, IHI reported a pre-tax loss of €4.12 million and the net loss for the year attributable to shareholders amounted to €10.4 million compared to the loss of €5.44 million posted in 2022. Shareholders’ funds grew by 1.1% to €613.3 million which translates into a net asset value per share of €0.9961.

Yesterday evening, Hili Properties plc also published its 2023 results. Total revenue, inclusive of other operating income, surged by 29.9% to a record of €16.3 million and operating profit rose by 43.7% to €12.1 million. The financial performance was also boosted by net fair value movements on property assets of €2.46 million but net finance costs surged by 49.3% to €6.93 million reflecting the interest on additional debt taken towards the end of 2022. The net profit attributable to shareholders amounted to €5.60 million, which translates into a return on average equity of 5.10%. Shareholders’ funds rose by 1.2% to €117.6 million which translates into a net asset value per share of €0.2933. The board of Hili Properties will be meeting on 6 May 2024 to consider the recommendation of a dividend.

HSBC Bank Malta plc advanced by 2.9% to the €1.41 on volumes totalling 40,704 shares. Today, HSBC published a quarterly update providing information about its performance in Q1 2024 when compared to the same period in 2023. Total revenue increased by 29% (or €14.6 million) as the Bank was able to earn higher interest on its excess liquidity. Furthermore, the Group registered higher business volumes which resulted in increases in net fee income, foreign exchange, and insurance income. The healthier credit quality of the bank’s loan books resulted in a release of expected credit losses of €1.8 million, which however was less than the release of €3.7 million in Q1 2023. HSBC noted that costs were maintained at the same level despite the impacts of inflation. The Bank explained customer loans remained broadly in line with the levels reported as at the end of 2023, but customer deposits decreased marginally due to a drop in operational corporate deposits. Overall, HSBC reported a profit before tax of €39.3 million compared to €26.5 million reported in Q1 2023 and €33.1 million in Q4 2023.

Also in the banking sector, Lombard Bank Malta plc recovered some of yesterday’s losses as it climbed by 3.2% to the €0.795 level across three deals totalling 9,210 shares. Last Friday, Lombard published its 2023 results. Net interest income surged by 16.1% to a record of €25.9 million. Total operating costs increased by 14.5% to €54.7 million reflecting the higher level of business. When adjusting the comparative figures to exclude the significant one-time reversals in expected credit losses in 2022, profit before tax rose by 17%. The net profit attributable to shareholders amounted to €9.06 million which translates into a return on average equity of 5.55%. Shareholders’ funds increased by 39.8% to €190.4 million, reflecting the proceeds raised from the Rights Issue that was concluded towards the end of 2023. Consequently, the net asset value per share dropped to €1.2317 compared to €1.4687 as at the end of 2022 (adjusted for the 2023 bonus issue). The Directors of Lombard are recommending a final net dividend per share of €0.0106 to all shareholders as at the close of trading on 24 May 2024, subject to regulatory approval as well as shareholders’ approval during the upcoming Annual General Meeting scheduled to be held on 27 June 2024.

Malta International Airport plc increased by 1.8% to the €5.70 level across four trades totalling 5,300 shares.

In the property sector, Malta Properties Company plc (+3.2%) and Plaza Centres plc (+3.4%) moved higher to the €0.32 and €0.61 levels respectively on muted activity.

Bank of Valletta plc was today’s most actively traded equity as it closed unchanged at the €1.41 level after failing to hold to an intraday high of €1.43 (+1.4%) across five deals totalling 54,340 shares.

APS Bank plc held the €0.57 level on a single trade of 2,500 shares.

The RF MGS Index extended yesterday’s gains as it rose by a further 0.17% to 890.255 points. Data released today showed that inflation in the Euro Area during April remained flat at 2.4% in line with expectations. The slowdown in the price increases for industrial goods as well as services offset the slower decline in energy prices and the faster price increase for food. Furthermore, the core inflation during April decreased to 2.7%, albeit less than the 2.6% which was projected. The eurozone GDP during the first quarter increased by 0.4% year-over-year (the largest rise since the second quarter of 2022), and exceeding forecasts of 0.2%. Meanwhile in the US, wages increased by 1.2% over the past three months, compared to the anticipated growth of 1.0%.

This report contains public information only and is not to be construed as investment advice or an offer to buy or sell any securities. Information contained herein is based on data obtained from sources considered to be reliable, but no representations or guarantees are made with regard to the accuracy of the data. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Rizzo, Farrugia & Co. (Stockbrokers) Limited is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap—370 of the Laws of Malta and a member of the Malta Stock Exchange.