Monthly Round up Report for May 2022: BOV settles the Deiulemar case

Last Updated on Thursday, 9 June, 2022 at 9:18 am by Andre Camilleri

The MSE Equity Total Return Index was back in the red during May, as it ended the month 0.2% lower at 7,783.049 points. A total of 26 equities were active, eight of which gained, while another 11 closed in the opposite direction. The total monthly turnover increased by €0.2m when compared to the previous month, totalling just over €2.9m.

In the banking sector, Bank of Valletta plc and FIMBank plc gained ground whilst HSBC Bank Malta plc and Lombard Bank Malta plc ended the month in negative territory.

Bank of Valletta plc (BOV) took centre stage during May after investors reacted to the bank’s agreement between BOV and the curators of the bankruptcy of the Deiulemar Group. The bank’s share price spiked to a monthly high of €1.78 but ultimately closed the month at the €0.89 price level, higher by 15.6%.

Without admission of any liability on either part, the bank will pay the sum of €182.5m to the curators of the bankruptcy of the Deiulemar Group in full and final settlement of the disputes and of all claims that had been made by the curators against the bank. It will henceforth be in a more secure capital position overall and will be better placed to carry out its business with confidence and sustainability.

In addition, last Thursday the bank published its interim directors’ statement. The BOV group delivered a profit before tax of €22m for the first quarter of the year, up by €12.7m from the same period in 2021. This improvement reflects the ongoing but as yet incomplete recovery from the COVID-19 pandemic, which was further underpinned by encouraging economic activity.

The group’s revenues in the first quarter were €58.4m, up by 5% over the comparable period last year. This is mainly due to consistent growth in lending, particularly home loans, coupled with increased revenues from payments and card business.

Operating costs for the first three months were higher by 3%, versus the same period in 2021, mainly attributable to higher employee compensation costs driven by an increase in headcount, as well as the group’s contribution to the Deposit Guarantee Scheme linked to higher customer deposit levels.

A net Expected Credit Losses reversal of €7m contributed to profitability in the first quarter of 2022. This reflected more favourable economic circumstances positively affecting the expected performance of specific sectors and individually significant exposures, coupled with better collateralised positions. Furthermore, a charge of €4.8m was taken in the quarter with respect to long outstanding non-performing loans, supporting the group’s prudent approach. The bank continues to actively assess its expected credit losses as economic prospects evolve.

During the second quarter of 2022, the bank intends to continue strengthening its Minimum Requirement for Own Funds and Eligible Liabilities (MREL) position in line with ongoing regulatory requirements. The planned issuance of a senior preferred bond on the international market will be specifically undertaken to meet the MREL target for the foreseeable future.

On the contrary, HSBC Bank Malta plc shed 1.3% over the month, to close at €0.77. The bank’s equity was significantly liquid, as 55 trades worth €183,929 were recorded while trading between a high of €0.82 and a low of €0.75.

Lombard Bank Malta plc and FIMBank plc moved in opposite directions, as the former lost 1.1% to the €1.83 price level, while the latter gained 6.8% to €0.22. Both banking equities were similarly active, with Lombard Bank Malta plc trading six times across 13,860 shares and FIMBank plc traded six times on a volume of 131,916 shares.

Lombard Bank Malta plc announced that during its AGM, all the resolutions on the agenda were approved, including a net dividend of €0.0195 and the issuance of 596,893 ordinary shares as a bonus issue with a nominal value of €0.25 per share.

The share price of telecommunications operator GO plc suffered a decline of 3.6% to the €3.18 price level, as 44 trades across 71,790 shares were recorded. Similarly, its subsidiary BMIT Technologies plc lost 0.8% to close the month at €0.476. The company’s shares changed ownership 13 times, with total trading turnover reaching €41,057.

The national airport’s equity was one of the most liquid during May, as Malta International Airport plc (MIA) shares were involved in 54 deals worth €511,641 and closed at the monthly high of €6.

MIA disclosed the financial performance for the first quarter of the year which had a sluggish start, as the tightening of travel restrictions at the end of 2021 had repercussions on consumer confidence, which extended well into the new year. Passenger numbers for the first quarter of 2022 remained 44.1% below pre-pandemic levels.

Despite the slow start, MIA’s continued caution in relation to cash management allowed the group to close the quarter with a revenue of €10.8m. This total was just over double the revenue the group had generated in Q1 2021, when traffic for the first three months of the year had amounted to just 98,493 passenger movements.

The increase of 26% in staff costs over Q1 2021 was driven by several factors including the lifting of a hiring freeze, which had been implemented at the onset of the pandemic, and the discontinuation of staff pay cuts between February and April 2021. The group’s operating expenses, on the other hand, increased by 25% as a result of a busier operation in comparison with the first quarter of 2021.

The group’s capital expenditure for the first quarter of 2022, which includes part of the investment in the complete overhaul of the airport food court, amounted to €1.2m. This project, the first phase of which was concluded last week, is expected to strengthen the retail and property segment, which is an important contributor to the group’s revenues. MIA turned around the loss of €3.1m it had registered in Q1 2021 to a profit before tax of €1.2m for Q1 2022.

During the month, Malta International Airport plc held its 30th Annual General Meeting where all resolutions were considered and approved.

Furthermore, MIA announced its traffic results for April. Last month brought busier days for MIA, as 513,979 passengers travelled through the terminal during the month. This figure marks a recovery of 78.7% of pre-pandemic passenger numbers, which is the strongest monthly recovery MIA has registered so far.

Reaching 77.8%, the seat load factor (SLF) for the month of April was just 5.6 percentage points below pre-pandemic levels, indicating that there was an encouraging demand for travel. Several factors, including the launch of the airport’s summer flight schedule together with the easing of Malta’s entry restrictions on April 11, were important contributors to April’s positive results.

The Easter period was possibly the strongest driving factor where MIA welcomed 133,267 passengers. The best-performing markets for the month remained unchanged from March, as Italy continued to top the leaderboard with 114,707 passenger movements, followed by the United Kingdom, France, Germany, and Poland.

April’s traffic augurs well for the upcoming months even though recently published data for the first quarter of the year shows that Malta’s recovery still lagged behind that of its Mediterranean competitors.

While Malta has eased many of its travel restrictions in recent weeks, survey results published by the European Travel Commission in April 2022 showed that 56% of Europeans who were planning to travel in summer had already chosen their destination.

RS2 Software plc shares closed €0.01 or 0.6% lower at €1.64. The IT company’s shares traded 24 times, with trading turnover tallying to €82,570. The equity is trading 5.8% lower since the start of the year. On the other hand, the company’s preference shares closed the month unchanged at €1.68.

Grand Harbour Marina plc was this month’s best performing equity, with the equity price rising by 16.1%. The company’s shares were active over 13 trades worth €28,488. The company announced that it resolved to distribute a gross dividend of €0.75m, equivalent to €0.0375c gross per ordinary share. This dividend was paid on May 30, 2022 to the ordinary shareholders who were on the company’s register of members as at close of business on May 23, 2022.

The two locally listed shopping mall equities, Plaza Centres plc and Tigne’ Mall plc were active during the month. The former saw its equity price trend 3.5% lower to €0.82 as a result of five trades on a volume of 38,000 shares. The latter equity traded flat on a mere volume of 2,949 shares over two deals and closed at €0.70.

The share price of International Hotel Investments plc was this month’s worst performer, as the shares plummeted by 13% to the €0.70 price level. The hotel operating equity traded 22 times across 138,737 shares. The company’s share price was fairly volatile, as it traded between a monthly low of €0.66 and a high of €0.795.

In the property sector, following a positive trading performance during April, AX Real Estate plc trended 9.2% lower to an all-time low of €0.545 on a volume of 221,958 shares over 11 deals.

On the contrary, Malita Investments plc (Malita) and Malta Properties Company plc (MPC) gained 5.3% and 3% respectively. Malita shares changed hands 10 times with 71,700 shares changing ownership to close at €0.79. Meanwhile, 13 trades over a volume of 59,603 shares ensured MPC closed higher at €0.52.

Malta Properties Company plc announced that it submitted an application to the MFSA for the admissibility to listing on the official list of the MSE for a Bond Issuance Programme of up to €50,000,000 and requested the approval of a base prospectus in relation to the same issue from the MFSA.

The market value of Hili Properties plc and VBL plc remained unchanged at the €0.24 and €0.25 price levels respectively. On a year-to-date basis, Hili Properties plc is down by 11.1%, while VBL Group plc is trading 16.7% less.

Hili Properties plc announced a performance update following the IPO in 2021, where the company acquired and secured acquisitions in Lithuania, Latvia and Benghajsa, Malta.

The performance of the property portfolio during the first quarter of 2022 was solid, with revenues reaching €2.4m. Earnings before interest, tax and depreciation (EBITDA) for the first quarter of 2022 stand at €1.5m and the EBITDA to revenue ratio has improved from 60% as at December 31, 2021 to 65% as at March 31, 2022.

The company’s cash reserves are positive, also given that the utilisation of the IPO proceeds is still underway. The board remains committed to the execution of the plans set out in the company’s prospectus dated October 25, 2021.

MIDI plc shares shed 1.1% to close the month at €0.376. The company’s equity traded three times, with trading value tallying to €3,880.

On the contrary, Trident Estates plc shares jumped 4.3% to the €1.46 level. Two deals involving a small volume of 2,550 shares were recorded.

The equity of Santumas Shareholdings plc was also active during May, trading flat at €1.09 across four trades of 5,082 shares.

Both Simonds Farsons Cisk plc (SFC) and PG plc (PG) shares closed unchanged at €8.25 and €2.24 respectively. SFC was one of the most liquid, as twenty five deals worth just over €253,600 were executed. PG shares recorded a monthly turnover of just over €36,260 across eight trades. On a year-to-date basis both equities suffered drops, as SFC lost 14.5%, while PG declined by 6.7%.

The board of Simonds Farsons Cisk plc met and approved the annual report and financial statements of the company and the group for the year ended January 31, 2022.

The group profit before tax for the financial year (FY) 2022 amounted to €12.2m, up by €7.8m when compared to the previous year. This significantly improved result compares well with the profit of €12.3 in FY 2020, the last pre-pandemic reporting period. The marked improvement in profitability resulted from increases in both revenues and gross margins, as well as cost efficiencies achieved. Net movement on provisions (including lower net provisions against trade and other receivables arising from the proactive management of trade credit) have also contributed to the result to the extent of €1.5m on a year-to-year comparative basis, with part of the precautionary COVID-induced provisions established in FY 2021 being released during the year under review.

EBITDA rebounded back to pre-COVID levels and amounted to €22.7m for the year, as compared to €14.9m in FY 2021. This increase of 52% reflects the improved profits reported for the year and is evidence of the cash generation capacity of the group’s businesses. The group’s net borrowings as at January 31, 2022 amounted to €10.3m. This represents a decrease of €8.3m from the previous year.

Gearing at the year-end stood at 12.6% as compared with 16.8% at the end of FY 2021. The reduction in indebtedness resulted from the strong focus on trade collections together with the VAT and Tax payment deferral schemes that remained in place during the year. Payment of these deferred liabilities are due to take place over a 30-month period starting in June 2022, leading to an increase in net indebtedness and gearing to more “normalised” levels at the end of such period.

Total equity of the group at the year-end amounted to €129.2m when compared to FY 2021 of €119.7m.

Mapfre Middlesea plc and MaltaPost plc suffered similar negative performance, as the former declined by 4.5% to close at €1.93, while the latter lost 6.4% to close at €1.02.

The board of MaltaPost plc approved the unaudited condensed consolidated interim financial statements for the six month period ended March 31, 2022. MaltaPost Group registered a profit after tax of €0.33m versus 2021’s profit of €0.89m.

The total revenue reduced by €4.5m to €15.7m, following a decrease in international cross-border mail and parcel volumes, as well as a drop in local single and bulk mail volumes. Expenditure stood at €15m, down by €4m due to a decline in said volumes, together with high airfreight and increased cost of terminal dues. The cost-to-income ratio rose to 95.6% due to the losses incurred to meet the Universal Postal Services Obligation.

The share price of M&Z plc advanced 2.7% to the €0.77 price level, as 14 trades across 66,826 shares were recorded. Since being listed on the local exchange in mid-March, the company’s share price increased by 7%.

APS Bank plc announced that on May 24, 2022 MFSA approved the prospectus to be published in connection with the IPO, as well as the bank’s application for authorisation for admissibility to listing of the bank’s ordinary shares on the official list of the MSE.

The listing is being sought in connection with a proposed public issue of 100m new ordinary shares with an over-allotment option of 10m new ordinary shares at an issue price of €0.62 per share. The new shares have been offered for subscription to the general public and preferred applicants, being directors or employees of the APS group or registered bondholders of the bank, as at close of business on May 23, 2022.

In terms of pre-allocation agreements, the bank has been conditionally bound to issue 69,681,981 new shares at an average price of €0.594 per share. A total of 40,318,019 new shares which include the additional 10m new shares, have been available for subscription by the general public and preferred applicants during the offer period for the IPO, which closed on the day of its opening. The bank took this decision on the back of strong demand from the investing public.

Loqus Holdings plc announced that as part of a re-organisation exercise aimed at streamlining operations, its subsidiary Loqus Consulting Ltd shall be merged with Loqus Services Ltd.

This shall happen following a share transfer whereby the company shall transfer its shareholding in Loqus Consulting Services amounting to 9,375 Ordinary B shares to Loqus Services Ltd. The company holds the totality of Ordinary shares issued in Loqus Services Ltd, with the exception of one share which is held by another group company.

Furthermore, the merger shall happen following a share transfer whereby Loqus Services Ltd shall acquire from Mr David Spiteri Gingell 3,125 Ordinary A shares in Loqus Consulting Ltd.

Upon the proposed merger by acquisition taking effect, Loqus Services Ltd as the acquiring company shall succeed to all the assets, rights, liabilities and obligations of Loqus Consulting Ltd, which, in turn, shall cease to exist. Loqus Consulting Ltd is currently non-operational and therefore the above transaction is intended solely for streamlining the Group’s operations.

The MSE Corporate Bonds Total Return Index declined by 0.1% to 1,145.599 points. Out of the 74 active issues, the 4.25% Best Deal Properties Holding plc Secured € 2024 was the most liquid bond, as it registered €1.9m in turnover and closed at €100.10.

The MSE MGS Total Return Index continued to trend lower after losing 2.1%, ending the month at 983.945 points. Out of the 19 active issues, the 5.25% MGS 2030 (I) generated the most turnover, totalling €2.4m, ending the month at €125.72.

In the Prospects MTF market, 12 issues were active. The 4.75% KA Finance plc Secured Callable Bonds 2026-2029 was the most liquid, as it generated a total monthly turnover of €27,467, ending the month at €93.99.

This article, which was compiled by Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such. The Company is licensed to conduct investment services by the MFSA and is a Member of the Malta Stock Exchange and a member of the Atlas Group. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 2122 4410, or email

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