Malta Industrial Parks has made marked improvements to its financial position, doubling its profits and cutting its costs.
MIP managed to improve its turnover from €11.8 million in 2012 to €13.5 million in 2013, in the meantime cutting its direct costs from €5.34 million to €3.98 million. Administrative expenses also decreased from €2.81 million to €2.63 million.
As a result it made a profit before tax of €3.5 million, compared to €1.28 million.
The board appointed in May 2013 set out to improve the company’s financials when it took over, by restructuring its debt, collecting its arrears, and introducing more governance with regards to tenants.
There is also a loan of €2m to cover 40.5 per cent of the refurbishment of the head office
MIP had been saddled with tens of millions in ‘debts’ by having to take on assets, including €35 million for the former Air Malta headquarters. It holds €103 million worth of investment property (up from €95 million in 2012), which was supported through bank loans. MIP is allowed to grant property if the applicant gets approval from Malta Enterprise, and also has the right to retain the income generated from the rentals. In 2013, MIP collected €13.2 million worth of lease payments (2012: €11.3 million).
MIP still has €83.9 million worth of loans due to be paid within more than a year (2012: €90 million), and €11 million due within a year (2012: €5.7 million). These include nine loans taken on by MIP to construct factories for big name companies, which these repay over a set number of years.
The amount also includes loans for the upgrade of industrial estates and relocation of factory tenants. There is also a loan of €2 million to cover 40.5 per cent of the refurbishment of the head office located within the former St Luke’s Hospital grounds.
Cash flows have also improved, and in 2013 MIP had positive cash flows amounting to €26,000 compared to negative outflows of €6.2 million in 2012.
However, the company is still saddled with interest of over €4 million a year and has unabsorbed trading losses of €32.2 million.
MIP also increased its provision for doubtful accounts from €278,635 to €477,729, bringing the accumulated provisions up to €949,656.
The company employed 10 managers and 56 staff in 2013.
The company paid net dividends of €400,000 compared with €1.03 million the previous year.