Malta International Airport plc published its interim results to June 30, following a board of directors' meeting held on July 17.
The directors declared a net interim dividend of €0.06 per share (June 2007: €0.058). The interim dividend is payable to those shareholders as at close of trading on Monday with the equity trading ex-dividend as from Tuesday.
During the first six months of 2008, MIA's total operating income grew by 9.3 per cent to €20.1 million as a result of an increase in passenger departures (+14.5 per cent), aircraft movements (+4.3 per cent), cargo traffic (+7.1 per cent) and mail (+3.5 per cent). During the first half of this year, passenger departures increased by 88,142 passengers to a total of 691,697. More importantly, the seat load factor increased from 65.2 per cent to nearly 70 per cent during the past six months.
Income from regulated fees including passenger service charge, aircraft landing and parking fees as well as security fees increased by 9 per cent during the period under review to €14 million. This represents 69.8 per cent of the company's total income. MIA's regulated fees are expected to remain unchanged until next March 31, after which the Airport Charges and Regulatory Board must devise a revised formula applicable to any changes to the regulated fees, among which the passenger service charge.
Revenues from retail concession outlets increased by 11 per cent to €2.2 million. This income component now accounts for 11 per cent of total income (June 2007: 10.8 per cent). Income from retail concessions is expected to rise in the coming reporting periods as a result of the new retail space and the agreement signed with Nuance Group Malta Ltd. The new contract comes into force in December and guarantees minimum revenue to MIA of €25.5 million for the six-year period to December 2014.
Revenue from aviation concessions totalled €1.3 million in the first six months of this year, a decrease of 3.8 per cent from the previous period while recharges of expenditure and other income comprising rental income and advertising revenue increased by 18 per cent to €2.6 million - accounting for 12 per cent of the company's operating income. The main factor behind the increase in other income is the revenue generated from the running of the car park. As from March 1, Sky Parks Ltd (a wholly owned subsidiary of MIA) took over the operation of the car park and between March 1 and June 30 this subsidiary generated total revenues of €0.18 million.
MIA's operating costs increased by 5.3 per cent to €14.2 million with staff costs rising by 5.4 per cent to €4.4 million and other operating costs up 3.2 per cent to €7.4 million. The depreciation charge increased by 12.7 per cent to €2.3 million, reflecting the increased investment in the extension of the air terminal and the resurfacing of the main runway. The operating profit of €6.1 million during the first half of this year represents a rise of 19.7 per cent over the comparative period in 2007. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 18 per cent to €8.4 million with an improvement in the EBITDA margin to 41.7 per cent (June 2007: 38.8 per cent). Finance costs increased by 3.5 per cent to €1.2 million on increased borrowing to fund the various investments undertaken. The company's pre-tax profit during the first half of the year increased by 26.2 per cent to €5.1 million. After accounting for taxation, the profit for the period amounted to €3.32 million, compared to €2.6 million in the six months to June 30, 2007. The earnings per share also increased by 26 per cent to €0.049 (June 2007: €0.039).
Total assets as at June 30 amounted to €122.8 million with shareholders' funds at €51 million. Based on the total number of shares in issue of 67,650,000, MIA's net asset value per share is of €0.756. The annualised post-tax return on equity (profit after tax dividend by average shareholders' funds) is of 13.2 per cent (June 2007: 10.6 per cent) with annualised return on assets (pre-tax profit divided by average assets) of 8.7 per cent (June 2007: 7.1 per cent). On a pre-tax basis, MIA's return on equity is 20.4 per cent.
During a press conference held on July 8, MIA's CEO Julian Jaegar reviewed MIA's passenger growth projections for this year from the initial estimate of 6.8 per cent to 8 per cent above the passenger movements in 2007 and 19 per cent higher than the figures recorded in 2006. MIA, however, noted that the projected figures may be adversely affected by the adverse economic conditions impacting the airline sector as oil and fuel costs now represent a larger chunk of the overall airline expenditure.
Legacy airlines increased the number of passenger movements by 34,500 with their market share decreasing to 71 per cent. On the other hand, low-cost carriers increased their share of operation to 20 per cent share of the total traffic to Malta. Air Malta and Ryanair were the airlines that gained most during the period under review. Both airlines remained the most important customers to MIA with market shares of 55.5 per cent and 13.6 per cent respectively. Passenger growth at Air Malta stood at 102,000 passengers while Ryanair experienced an increase of 97,000 passengers travelling to and from Malta. Easyjet carried nearly 58,000 passengers during its first months of operations, while Lufthansa and Emirates also saw an increase in traffic. Most markets reported growth, especially the French and Spanish markets with traffic increasing by 24 per cnet and 762 per cent respectively compared to the same period last year. Mr Jaeger explained that growth at MIA far exceeded the average growth within the EU. On average passenger growth in EU airports was of 6.2 per cent during the first four months of this year. On the other hand, Malta International Airport recorded a passenger increase of 16 per cent until April.
MIA's share price traded up to a high of €3.38 by the end of April but the weak sentiment that also hit the local stock market resulted in the share price slipping to a low of €3.061 by mid-July. The reaction in the market to the record interim financial statements and the dividend announcement was positive as the equity partly recovered to €3.12.
Mr Rizzo is director of Rizzo, Farrugia & Co. (Stockbrokers) Ltd.
The directors declared a net interim dividend of €0.06 per share (June 2007: €0.058). The interim dividend is payable to those shareholders as at close of trading on Monday with the equity trading ex-dividend as from Tuesday.
During the first six months of 2008, MIA's total operating income grew by 9.3 per cent to €20.1 million as a result of an increase in passenger departures (+14.5 per cent), aircraft movements (+4.3 per cent), cargo traffic (+7.1 per cent) and mail (+3.5 per cent). During the first half of this year, passenger departures increased by 88,142 passengers to a total of 691,697. More importantly, the seat load factor increased from 65.2 per cent to nearly 70 per cent during the past six months.
Income from regulated fees including passenger service charge, aircraft landing and parking fees as well as security fees increased by 9 per cent during the period under review to €14 million. This represents 69.8 per cent of the company's total income. MIA's regulated fees are expected to remain unchanged until next March 31, after which the Airport Charges and Regulatory Board must devise a revised formula applicable to any changes to the regulated fees, among which the passenger service charge.
Revenues from retail concession outlets increased by 11 per cent to €2.2 million. This income component now accounts for 11 per cent of total income (June 2007: 10.8 per cent). Income from retail concessions is expected to rise in the coming reporting periods as a result of the new retail space and the agreement signed with Nuance Group Malta Ltd. The new contract comes into force in December and guarantees minimum revenue to MIA of €25.5 million for the six-year period to December 2014.
Revenue from aviation concessions totalled €1.3 million in the first six months of this year, a decrease of 3.8 per cent from the previous period while recharges of expenditure and other income comprising rental income and advertising revenue increased by 18 per cent to €2.6 million - accounting for 12 per cent of the company's operating income. The main factor behind the increase in other income is the revenue generated from the running of the car park. As from March 1, Sky Parks Ltd (a wholly owned subsidiary of MIA) took over the operation of the car park and between March 1 and June 30 this subsidiary generated total revenues of €0.18 million.
MIA's operating costs increased by 5.3 per cent to €14.2 million with staff costs rising by 5.4 per cent to €4.4 million and other operating costs up 3.2 per cent to €7.4 million. The depreciation charge increased by 12.7 per cent to €2.3 million, reflecting the increased investment in the extension of the air terminal and the resurfacing of the main runway. The operating profit of €6.1 million during the first half of this year represents a rise of 19.7 per cent over the comparative period in 2007. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 18 per cent to €8.4 million with an improvement in the EBITDA margin to 41.7 per cent (June 2007: 38.8 per cent). Finance costs increased by 3.5 per cent to €1.2 million on increased borrowing to fund the various investments undertaken. The company's pre-tax profit during the first half of the year increased by 26.2 per cent to €5.1 million. After accounting for taxation, the profit for the period amounted to €3.32 million, compared to €2.6 million in the six months to June 30, 2007. The earnings per share also increased by 26 per cent to €0.049 (June 2007: €0.039).
Total assets as at June 30 amounted to €122.8 million with shareholders' funds at €51 million. Based on the total number of shares in issue of 67,650,000, MIA's net asset value per share is of €0.756. The annualised post-tax return on equity (profit after tax dividend by average shareholders' funds) is of 13.2 per cent (June 2007: 10.6 per cent) with annualised return on assets (pre-tax profit divided by average assets) of 8.7 per cent (June 2007: 7.1 per cent). On a pre-tax basis, MIA's return on equity is 20.4 per cent.
During a press conference held on July 8, MIA's CEO Julian Jaegar reviewed MIA's passenger growth projections for this year from the initial estimate of 6.8 per cent to 8 per cent above the passenger movements in 2007 and 19 per cent higher than the figures recorded in 2006. MIA, however, noted that the projected figures may be adversely affected by the adverse economic conditions impacting the airline sector as oil and fuel costs now represent a larger chunk of the overall airline expenditure.
Legacy airlines increased the number of passenger movements by 34,500 with their market share decreasing to 71 per cent. On the other hand, low-cost carriers increased their share of operation to 20 per cent share of the total traffic to Malta. Air Malta and Ryanair were the airlines that gained most during the period under review. Both airlines remained the most important customers to MIA with market shares of 55.5 per cent and 13.6 per cent respectively. Passenger growth at Air Malta stood at 102,000 passengers while Ryanair experienced an increase of 97,000 passengers travelling to and from Malta. Easyjet carried nearly 58,000 passengers during its first months of operations, while Lufthansa and Emirates also saw an increase in traffic. Most markets reported growth, especially the French and Spanish markets with traffic increasing by 24 per cnet and 762 per cent respectively compared to the same period last year. Mr Jaeger explained that growth at MIA far exceeded the average growth within the EU. On average passenger growth in EU airports was of 6.2 per cent during the first four months of this year. On the other hand, Malta International Airport recorded a passenger increase of 16 per cent until April.
MIA's share price traded up to a high of €3.38 by the end of April but the weak sentiment that also hit the local stock market resulted in the share price slipping to a low of €3.061 by mid-July. The reaction in the market to the record interim financial statements and the dividend announcement was positive as the equity partly recovered to €3.12.
Mr Rizzo is director of Rizzo, Farrugia & Co. (Stockbrokers) Ltd.