The Malta Stock Exchange (MSE) Equity Total Return Index partially erased the previous week’s 1.842 per cent loss, advancing by 1.178 per cent to close at 8,470.845 points. Activity was spread across 17 equities, of which eight appreciated and five fell in value. Turnover fell to €910,608 from €952,670.
International Hotel Investments plc (IHI) shares headed the list of gainers, advancing by €0.045, or 7.5 per cent, thus registering a 2.9 per cent rise year-to-date. There were 18 deals of 130,570 shares in hotelier’s equity, which closed at €0.645. IHI published its financial statements for 2017, which showed a net profit of €14.9 million, up from a €7.7m loss in 2016. This profit figure is the highest in the company’s 18-year history. The positive results were backed by improved performances across all the operating hotels, as total revenue increased from €157.9 million to €242.4m. The increase in revenue is mainly attributable to the consolidation of the Corinthia Hotel London, which contributed €68.7 million of the increase; the remaining €15.8m is the result of continuing performance improvements in the other operations of the company.
This increase in revenues translates to a rise in EBITDA (Earnings before interest, tax, depreciation and amortisation) of 16 per cent to €61.2 million over last year’s adjusted EBITDA, to exclude the effect of the consolidation of NLI Holdings. The difference from the EBITDA to the net profit figure is mainly due to a depreciation and amortisation figure of €31.1 million, and interest expenses of €22.5m. Earnings per share stood at €0.02 per share, compared to the previous year’s figure of €0.01.
A net loss of €7,633,559 was registered by Medserv plc
Despite the positive results, no dividends were declared for 2017; however, company chairman Alfred Pisani said in an interview that the board intends to adopt a dividend policy in the near future, suggesting that an interim dividend may be issued during 2018 after the process of rationalising the dividend from an accounting and cash flow point of view is complete.
IHI is expanding its operations through projects such as the acquisitions of the Corinthia Palace Hotel, the operations agreement in the Grand Hotel du Boulevard in Bucharest, and the management of the Corinthia Hotel in Dubai.
Bank of Valletta plc (BOV) shares partially reversed the previous week’s 3.4 per cent decline, climbing by 1.2 per cent after 37 transactions of 88,347 shares, closing at €1.73. The bank’s annual general meeting will be held on Thursday, and among other matters, shareholders will be asked to approve that a gross final dividend of €0.08 per share, as recommended by the directors, be distributed either in cash or by the issue of new shares at the option of each individual shareholder.
HSBC Bank Malta plc shares extended the previous week’s 1.2 per cent increase, advancing by a minimal 0.6 per cent as 62,139 shares changed ownership in13 deals, to close at €1.73.
Last Monday, Lombard Bank Malta plc announced that Virtu Holdings Ltd have increased their total shareholding in the company from 4.42 per cent to approximately 9.41 per cent, following the acquisition of just over 2.2 million ordinary shares, through an off-exchange transaction. The banking equity was not active last week.
Mapfre Middlesea plc registered no change in its share price of €1.90 as three transactions of 3,931 shares were concluded.
GO plc’s share prise rose 0.6 per cent, partially erasing the previous week’s 1.7 per cent decline. The equity was traded in six deals of 10,840 shares, closing at €3.46.
RS2 Software plc shares partially reversed the previous week’s 9.3 per cent drop, recouping 2.4 per cent as 12 transactions of 48,742 shares were concluded, to close €0.03 higher at €1.30. The IT services provider published its annual report and financial statements for 2017. The group’s profit after tax for 2017 was €614,796, up by 35.7 per cent from 2016. Operating profit for the year increased by 92 per cent to over €1.6 million. A major drag on the net profit was that finance costs more than tripled during the year, to €466,616. This was mainly due to changes in exchange rates, as a non-operating unrealised exchange loss of €357,939 was recorded in 2017, compared to an unrealised gain of €143,807 in 2016. Earnings per share rose to €0.005, from €0.003 in 2016. The board has resolved to recommend for approval at the AGM the payment of a final net dividend of €0.0146 per share to all registered shareholders as at close of business of May 18.
Loqus Holdings plc shares were the week’s worst performers, sagging 24 per cent as 356 shares changed hands in one deal, closing at a low of €0.076.
Medserv plc recorded no change in its €1.10 share price as three deals of 18,700 shares were executed. Last Monday, Medserv announced its financial results for the year ended December 2017. The company was negatively affected by a slowdown in demand for its services, delays in drilling projects, and pressure on profit margins due to a downturn in the oil and gas service industry. As a result, a net loss of €7,633,559 was registered by the group, compared to a profit of €3 million in the previous year.
Revenue fell by 12.3 per cent from €32.8 million in 2016 to €28.8m last year. But costs did not fall at the same rate. Although cost of sales fell 6.1 per cent, administrative expenses rose 34.5 per cent to €6.9 million. Another major factor for the loss was a 55.2 per cent rise in finance costs to €4.4 million. The company said the delayed drilling projects are still in place and are expected to contribute during the coming year. In another announcement, the company gave an update on its performance for the first quarter of 2018, showing signs of improvement. Turnover was up by 19 per cent over the same period last year, which translated to a 56 per cent improvement in EBITDA.
In a separate announcement, Medserv announed that its two main shareholders, Anthony S. Diacono and Malampaya Investments Ltd, have informed the board that they intend to seek a strategic purchaser to acquire all or part of the major shareholders’ holdings in the company. The process is still at a very early stage, and at this point there is no certainty that a suitable buyer will be found or that negotiations will be successful.
Malta International Airport plc shares fell 0.4 per cent after 17 deals of 29,939 shares, to close at €4.84.
PG plc registered a 0.8 per cent increase in its share price as seven deals of 28,130 shares were negotiated, closing at €1.31.
Simonds Farsons Cisk plc (SFC) shares traded flat at €6.70 as two transactions of 4,442 shares were executed. The company announced its AGM will be held on June 21.
SFC’s spin-off Trident Estates plc added to the previous week’s 12.5 per cent drop, slipping by 0.6 per cent after two deals of 16,500 shares, to close at €1.60. The company’s AGM is set for June 27. The company announced that its three major shareholders have sold some of their shares in order to secure full compliance with the 25 per cent free float requirement for listing.
Tigné Mall plc shares traded unchanged at €0.95 on one deal of 1,555 shares. In the same sector, Plaza Centres plc shares erased the previous week’s 1.9 per cent increase, declining by 1.9 per cent after six transactions of 111,850 shares to close at €1.04.
Malta Properties Company plc shares reversed the previous week’s 2.6 per cent gain, slipping by 3.8 pr cent after five deals of 36,268 shares, to close at €0.452.
Malita Investments plc shares rose by 1.8 per cent as 58,029 shares changed ownership in nine deals, closing at €0.845.
Midi plc shares recouped the previous week’s 0.6 per cent loss after advancing by 1.1 per cent as two transactions of 58,000 shares were negotiated, to close at €0.358.
In the corporate bond market, 35 issues were active, of which 17 rose and 10 declined as turnover remained stable at €1.1 million. The six per cent Medserv plc sec. & grntd € notes 2020-2023 S1 T1 3 headed the list of fallers, stumbling by 4.3 per cent to close at €101.50, while the 5.8 per cent IHI 2021 was the best performer, advancing by three per cent to close at €108.90.
Investors geared toward the sovereign debt market as 17 out of 18 active issues closed in positive territory. Turnover fell to €1.7 million from €2.5m. The 2.1 per cent MGS 2039 (I) was the most liquid issue with a turnover of €293,436, to close 0.2 per cent higher at €101.82.
This article, which was compiled by Jesmond Mizzi Financial Advisors Ltd, 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 Ltd at 67, Level 3, South Street, Valletta, or on Tel. 2122 4410, or e-mail info@jesmondmizzi.com.