Daily Market Highlights (27.05.2021)

GO publishes bond prospectus


The MSE Equity Price Index posted a three-day losing streak as it inched 0.06% lower to 3,991.226 points. The index was dragged lower by the declines in BMIT and MPC whilst MIA and RS2 both closed unchanged. Meanwhile, overall trading activity was muted today as just under €0.04 million worth of trades changed hands. Download today’s Equity Market Summary.

Today, GO plc published a prospectus in relation to the issuance of €60 million bonds maturing in 2031 at a coupon of 3.50% per annum. The net proceeds from the bond issue will be primarily used by the company to repay borrowings held with the European Investment Bank, to rollout a new network and for investment in information technology systems. GO has reserved up to €30 million of the bond issue for subscription by authorised financial intermediaries through placement agreements. Meanwhile, the remaining amount of €30 million will be made available for subscriptions from preferred applications and the general public. The bonds are expected to be admitted to the Official List of the Malta Stock Exchange on Monday 5 July 2021 whilst trading would be possible as from Tuesday 6 July 2021. Meanwhile, GO held its Annual General Meeting today and approved the final net dividend of €0.16 per share which will be paid on Monday 31 May.

Elsewhere, Malta Properties Company plc eased by 0.9% to the €0.54 level as 8,242 shares changed hands.

In the technology sector, BMIT Technologies plc declined by a further 2% to the €0.48 level across 53,400 shares. BMIT is due to pay out a final net dividend of €0.2922 per share tomorrow. RS2 Software plc traded flat at the €2.00 level across a single trade of trivial volumes.

Elsewhere, Malta International Airport plc remained at the €6.40 level across two deals totalling 1,093 shares.

Today, Medserv plc published an Interim Report providing an overview of the company’s performance during the Q1 2021 as well as the forecasts up to the end of the current quarter. Medserv explained that revenues in Q1 2021 amounted to €5.9 million which represents a 33% decline when compared to the same period in 2020. The reduction in business was seen across both ILSS activity and the OCTG segment, reflecting the disruptions caused by the pandemic. However, Medserv also noted that a rebound in activity is expected to be registered in Q2 2021. In fact, the forecasts for the first six months of 2021 show that Medserv is anticipating OCTG revenues to climb to €7.7 million which, however, would still be 11.5% lower than the amount of €8.7 million in OCTG revenues recorded in H1 2020. On the other hand, ILSS revenues are anticipated to amount to €10.7 million in H1 2021 which, in turn, is 11.5% higher than the figure of €9.6 million recorded in H1 2020. Overall, EBITDA dropped to €1 million in Q1 2021 compared to €1.5 million in the same period last year. Moreover, given the projected increase in business in Q2 2021, EBITDA is expected to surge by almost 55% to €4.8 million compared to €3.1 million in H1 2021.

In a separate announcement, the company explained that Medserv Egypt has been awarded a second contract by BP. This contract, for the Integrated Facility Management of the West Nile Delta Site in Idku, Egypt represents the largest award in value terms secured to date by the company in Egypt. The contract will take effect in June 2021 for a term of three years with an option for BP to extend the term by a further year. It is expected that this contract will be serviced through Medserv’s internal resources and will not require major capital expenditure.

The RF MGS Index advanced for the sixth consecutive session as it gained 0.05% to 1,106.695 points after the European Central Bank’s (‘ECB’) accommodative monetary policy stance is likely to continue for the foreseeable future. In an interview published yesterday, ECB executive board member Fabio Panetta stated that a premature withdrawal of policy support would risk damaging the recovery before it becomes self-sustained. He claimed that the present economic conditions do not justify reducing the pace of ECB’s €1.85 trillion pandemic emergency purchase programme. With regards to inflation, Panetta warned that one should not extrapolate projections from what is happening in the US, since the Eurozone is not expecting the same kind of surging demand and tight labour markets that would generate stronger lasting price pressures.

Yesterday, Simonds Farsons Cisk plc published its Annual Report and Financial Statements for the year ended 31 January 2021 which exceeded the projections published in the Financial Analysis Summary. During the period under review, Farsons generated €73 million in turnover compared to €103.5 million in the previous year – a decrease of 29.4%. The reduction in turnover was experienced across all segments, with the higher drops being registered in the beverage’s importation operations and the franchised food retailing establishments, both of which were heavily impacted by the lack of tourist traffic and the closure and other regulations imposed on hotels, bars and restaurant outlets at various periods during the past financial year. Overall, the Group generated a profit before tax for the year which amounted to €4.4 million, a decrease of €7.9 million over that reported in FY2020. In its commentary, the Directors explained that the immediate outlook remains uncertain, as does the speed at which the economy and the tourism market will re-open and recover to pre-Covid levels. However, given the effectiveness of the vaccine and inoculation programs, the Directors are cautiously optimistic that it will be able to report improved results in FY2022, absent any marked deterioration in the public health outlook. Meanwhile, in view of the ongoing uncertainties caused by the pandemic, the Directors resolved not to recommend the payment of a dividend.