MiddleSea makes €20.6m loss

James Portelli

Apr 29th 2009, 08:36

As an insurance practitioner and MSI shareholder I understand that shares go up as well as down and our business is cyclical by nature. We need to keep things in perspective. Despite the loss, it is important to recognise the MSI has a capable Board of Directors lead by a VERY capable Board of Management and, as a result, also has a strong Balance Sheet. Ths is the first time in 27 years (and at least 5 tough market cyles since early 1980s) that the company registered a loss. I am confident that the Board of Management will leave no stone unturned to rectify these results going forward ... and by the way, for the people politizising the issue , you are not bringing anything constructive to the table. And for comment of directors income / bonuses etc.. it may be well worth remembering that MSI Directors did not receive directors' fees for more than half the 27 years of the company's existence!

G.Cauchi

Apr 28th 2009, 23:22

It's no surprise that MSI registered such a loss. Just a month ago, (see The Times of the 28 March), Global Capital registered €6.8m loss being a company by far smaller than Middlesea. Bank of Valletta and HSBC registered a drop in their profits too.

Air Malta registered loss of income, Gozo Channel likewise, hotels complain of 14% less tourists, and the list goes on. More companies are now seeking Government's direct intervention like ST and Dedicated Micros to mention but two.

Then comes Tonio Fenech and claims that Malta would be unscathed by the international economic turmoil. Say it to the marines Tonio!!

R Agius

Apr 28th 2009, 22:46

@Pat Muscat
Joining the EU will impose on Iceland precisely the same regulatory regime as we have here in Malta. The regulation and solvency margins imposed within the Eurozone have proven to be more resilient than the US or UK. Many European financial institutions were exposed to the US Sub prime market because they were misled by the credit institutions.

All this goes to prove that regulation can influence business performance to a point - it is there to safeguard the consumer primarily. Which all goes to prove that in spite of regulation a business can still be poorly managed - and that has nothing to do with the Govt.

More to the point our dear friend Dr Muscat was vehemently against EU membership and latterly against Euro adoption and on both points had we taken his advice we would be in far worse shape than we are now. Moreover we would have had Dr Sant as PM and that in itself is another sad story.

MSI's poor performance has nothing to do with the Govt or Govt policy.

Muscat.Pat

Apr 28th 2009, 21:36

@R Agius
Iceland's government was a conservative one, till yesterday!Now they elected the socialists! However, Iceland got bankrupt not because it did not have the Euro, but because its banks lended more than their base capital dictated.Indeed, Iceland has a small market- like ours, but to overcome this weakness, they used the internet to develop on a world wide scale, Internet Banking. The problem was that they did not believe in regulations and in the power of the state to regulate ( socialist?) but in self regulation, or rather in blind faith of the markets! European and American banks encouraged consumers to borrow and spend and when the going was good no one dared doubt this model. The problems of Iceland and elsewhere, go back to the ideological approaches, stretching back as far at least as the 'liberalization' of markets in the late 80's. Since then the political climate has fostered derugulation-like Malta-with politicians supporting light-touch rules, that took into consideration the business interests rather than those of the consumer. Credit rating agencies were not objective in their rating and their assessments were paid for by the very firms that sell securities the agencies review! De-regulation was the main problem.

R Agius

Apr 28th 2009, 19:56

@Brandon Camilleri
Since when does membership of the EU have anything to do with how well you manage a business or an operation? You are determined to politicize anything and everything regardless of political influence. The EU and the Govt create the framework for wealth creation - they do not manage businesses!

It is no mystery and since when did anyone ever say Malta will not be affected by the recession? The PM sent out warning signals during the election campaign - but you were probably too busy celebrating the PL win to have noticed.

Remember one thing tho......if the PM had taken Joseph Muscat's advice, first we would not have been part of the EU and secondly we would not have been part of the Euro. Now go have a look at what happened in Iceland and what the top priority of their newly elected Govt is - to join the EU and the Euro.

Muscat.Pat

Apr 28th 2009, 18:50

There seems to be a pattern with Maltese investments in Italy: they all end up as a financial disaster! Take the free port in Calabria, it ended up bankrupt too! And now this 28 million euro loss for a Maltese company is unbelievable! This is the first time this company has incurred a loss, and what a loss! . So Air Malta is losing money,Middle Sea too and to conclude the Vat Department lost millions! All is not well in the state of Malta and the sooner we have a change of guard, the better for us all!

Brandon Camilleri

Apr 28th 2009, 18:48

Hey how come this is happeneing. Ain't we part of EU now and the Eurozone and all godsends. How come these things happen also in the EU.cause as far as we know from the media these things only occur in countries outside the EU and Eurozone.

This is a mystery especially when one considers that theMaltese were assured that we would not have been impacted this much !!!!!

Paul Smith

Apr 28th 2009, 18:26

If i where a Maltese investor i would get out of equities and property as well as bank shares.
This whole Global economic crash was caused by an energy shock, or the last oil crisis.
Think about it, $4 or $5 oil killed the US economy drove business and consumers to the wall and then they could not keep up home loan payments - global oil production peaked in 2006 or 2007 we are now on the way down the bell curve or sitting at the top. Our money system is debt based, it lends money on future economic earning potential, it ceases to function in a world of declining energy.
It really is that simple, it will all become very apparent to all of us very soon.

Louis Gatt

Apr 28th 2009, 17:23

Thank you very much for refusing any divided on last year's business. Once again stake holders pay the price! I am curious to know if Middle Sea is in any way controlling recurrent expenses to adjust to the present financial situation. What about some internal pruning of useless expenses such as commissions, sponsorships, perks and allowances? Why is it that the investor that has to foot the bill? After all, when things look good we don't get much either!! It looks like the performance of the world financial markets has become a good excuse. I call the loss of €20.6m a whopping loss.

Joe Tabone-Adami

Apr 28th 2009, 15:27

Is it reasonable to presume that the bonuses and perks of the Group's top-level personnel were in no way affected downwards by the 'bad harvest' during 2008, please?

Gorg Borg

Apr 28th 2009, 15:15

High time the board members resign after such a disappointing result. Looks like the "Italian" investment did not work out too well....!

c.caruana

Apr 28th 2009, 15:07

looool this is news....while our economy is shrinking, everyone is talking about illegal imigrantion.
WAKE UP PEOPLE, IMMIGRATION IS NOT OUR PROBLEM, OUR PROBLEM IS OUR ECONOMY!!