Occupancy at Palm City boosts MIH half-year profit

Income generated from unit leasing at Palm City Residences, the luxury village outside Tripoli, has boosted Mediterranean Investments Holding plc’s first half post-tax profit to €4.4 million, from last year’s €119,041.

MIH registered an operating profit of €9,033,690, up from the €3,226,507 achieved during the corresponding period last year.

This improvement in results came despite finance costs increasing to €4.7 million from last year’s €3.4 million, after charging interest on shareholders’ loan made available to the company at the end of 2011 of €314,466 and providing for an unrealised loss on exchange of €369,446.

Palm City Residences now enjoy 82 per cent occupancy, with 338 units spread across various term contracts of up to five years.

To meet financial commitments during the crisis in Libya last year, MIH shareholders provided a loan of €13.2 million at an interest rate of five per cent per annum to meet the cash flow shortfall. This was necessary mainly for the company to meet its bond interest costs and for Palm City to meet its commitments with capital creditors.

Earlier this year, discussions were undertaken to proceed with the investment of the 25 per cent shareholding of MIH in Medina Tower Joint Stock Company.

A second equity payment of €3.9 million was made on April 16 and another equity payment of €4.7 million was effected on May 14, bringing the total amount invested by MIH in the joint stock company to €12.5 million.

A final equity payment of €500,000 was effected in July by MIH, so that the amount invested in MTJSC is €13 million.

MIH said the joint stock company re-engaged the consultants on the Medina Tower project and to date, good progress was registered in reconvening the project team.

The management has already finalised the negotiations with the main contractor for the project and works on site are now expected to start later on this year.

The directors believe the opportunity for the Medina Tower project has increased significantly after the conflict period.