MIDI plc – Approval of Interim Financial Statements

Last Updated on Thursday, 27 August, 2020 at 1:29 pm by Andre Camilleri

The Board of Directors of the company has considered and approved the company’s unaudited interim financial statements for the six months ended 30 June 2020.

Principal activity

The principal activity of the group is the development of the Manoel Island and Tigné Point project.

Material events & transactions

In preparing this Report, the Directors have taken regard of the material events and transactions for the period ended June 2020, and their impact on the condensed set of financial statements, together with the prospects for the remaining six months ending 31 December 2020.

The Relevant Period has been characterized by the ongoing COVID-19 pandemic and the negative consequential effects it has had on both the local as well as global economies. This has partially impacted MIDI Group’s financial results for the six months ending 30 June 2020.

During the Relevant Period, the MIDI Group has registered a loss after tax of €1.1 million compared to a profit after tax of €3.0 million registered for the same period last year.

As anticipated, no revenue has been generated from property sales (2019: €8.0 million). This is mainly due to the fact, that the company has a very limited number of properties for sale following the successful delivery of the Q2 apartments over the past two years.

In addition, demand for these remaining apartments has been subdued due to the ongoing pandemic.

Revenue for the six months amounted to €1.1 million (2019: €9.6 million) which was solely generated by the property and rental management sector of the Group resulting in an overall operating loss of €723k (2019: profit of €4.3 million).

Revenues from this sector are lower than what has been budgeted and lower than that recorded for the same period in 2019 (a negative variance of €300k) as a consequence of the company granting rent concessions to the tenants of its commercial properties and to its car park operator by way of support during the COVID-19 pandemic.

Total assets have decreased marginally from €234.6 million as at 31 December 2019 to €234.1 million, while the Group’s Net Asset Value also decreased from €104.0 million to €102.9 million, resulting in a Net Asset Value per share of €0.48 (€0.49 as at 31 December 2019).

The Group’s results for the Relevant Period also include the consolidation of the financial results of its subsidiary Solutions & Infrastructure Services Limited as well as the Group’s 50% share of the financial results of Mid Knight Holdings Limited, a joint venture company which owns and operates “The Centre” office block located at Tigné Point.

The Group’s share of MKH’s profit for the Relevant Period amounted to €991k (2019: €805k).

The Company’s primary focus during 2020 has continued to be the development of Manoel Island. The revised Outline Development Permit for Manoel Island was approved by the Planning Authority on the 7 March 2019, however this permit was appealed by the NGO Flimkien Għal Ambjent Aħjar.

As announced by the company in June 2020, the appeal lodged by the FAA was partially upheld by the Environment & Planning Review Tribunal on 17 June 2020. The EPRT concluded that the company must submit a fresh Environment Impact Assessment to the Environment Resources Authority in order for the Planning Authority to reconsider the Outline Development Application.

The decision of the EPRT will delay the commencement of the development; however the company remains committed to the project and is working to ensure that the updated EIA is concluded, with a view to resubmitting the Outline Development Application to the Planning Authority during the last quarter of 2020.

On 16 April 2020, a full development permit was granted by the Planning Authority for the development of the residential block at Tigné Point, which will be marketed as Q3, consisting of 63 apartments, 4 levels of car parking and the landscaping, paving and embellishment of the Garden Battery and adjoining areas.

This permit is now subject to an appeal which was lodged by the Fort Cambridge Residents Association.

Notwithstanding this, the Group is continuing with both the design and procurement processes of the development, in order to be in a position to commence works immediately, should the appeal be decided in MIDI’s favour.

The outlook for the second half of the year remains a challenging one given the uncertainties within both the local and global economies in view of the COVID-19 pandemic. The company is envisaging a similar financial performance to the one registered in the first half of 2020 given that demand for its limited number of properties is expected to remain subdued as well as it expects to continue supporting the tenants of its commercial properties in the form of rent concessions for the short term. Nevertheless, the company is confident that it has the necessary financial resources to continue weathering this challenging period and meeting all its obligations as they fall due, as it has been doing over the past months.

With regards to sale of properties the company has recently entered into a promise of sale agreement for the sale of one the remaining Q2 units for €3.9 million and this together with the resultant profitability will be accounted for in the financial year of 2021 when this sale is expected to be finalized.

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