Malta Properties Company reports 40% increase in interim pre-tax profits

Malta Properties Company plc (MPC) has announced interim pre-tax profits of €928,358 for the six months to 30 June 2016, a 40% increase on the same period last year.

The company was a fully owned subsidiary of GO p.l.c. (GO), Malta’s leading telecommunications business, tasked with managing the latter’s commercial premises.

Since 2015, MPC has been spun off from GO. Today, MPC owns and manages properties formerly owned by GO.

The company said it had registered a marginal increase in revenues from the leasing of its properties from €1,608,500 in the first six months of 2015 to €1,662,925 over the same period this year.

“In the short to medium term, these revenue levels are expected to remain stable and increase gradually in line with inflation, as MPC has a number of long term lease agreements with its tenants in place. These long term leases on various properties will also shield the Company from any potential unforeseen economic uncertainties,” MPC said.

MPC’s operating profit for the six-month period stood at €1,370,713 (2015: €1,587,645) due to a substantial increase in administrative expenses as a result of the independent operation of the group following its spin-off from GO p.l.c. and its listing on the Malta Stock Exchange towards the end of 2015.

Profit for the period also decreased from €1,702,723 to €551,115, mainly because of a tax credit following changes in taxation rules on capital gains on the transfer of immovable property in 2015.

Finance costs, however, decreased considerably to €442,355 (2015: €928,571). This was due to a reduction in borrowings from €49 million to €16 million towards the end of 2015. In its statement the Company announced that a decision on dividend distribution for 2016 would be taken on the basis of full year results and therefore, no dividend has been declared with these results.

MPC CEO, Nikhil Patil, said: “These interim results once again highlight the sound financial position of MPC, underpinned by a number of long term lease agreements on several properties. This stability means that MPC is able to progress further with the redevelopment of three important sites in its portfolio, namely the Zejtun Exchange, the Marsa Spencer Hill Exchange, and the Birkirkara Exchange. The transformation of these three sites into leading technical, commercial and retail centres should have a significant positive impact on MPC’s rental income from 2019 onwards.”

MPC Chairman, Deepak Padmanabhan, said: “This first set of six monthly results issued since MPC listed on the Malta Stock Exchange highlight the sustainable progress which the Company is making as it works towards delivering on its strategy to become Malta’s leading provider of commercial real estate. MPC remains very well placed to look to the future with optimism.”