Nationalist Party registered €607,279 deficit in 2019

Party contribution to keep Media.Link afloat increased from €13.4 million in 2018 to €14.3 million by end-2019 after €919,965 was advanced to the media company. Labour yet to present statement of accounts for 2019

The Nationalist Party’s statement of accounts for 2019 show the party declaring a €607,279 deficit in 2019, but Labour has yet to present its accounts despite legal obligations to present them on an annual basis.

The accounts show that the PN’s total contribution to its media company had reached €14.3 million by the end of the year up from €13.4 million in 2018.

The party’s finances were lately in the spotlight after party leader Bernard Grech recently declared that the party was €32 million in debt, and losing thousands of euros because of its media company Communications. “We don’t have the liquidity needed to lead a campaign for the European Parliament and local council elections in two years’ time,” Grech admitted.

But in its statement for 2019, the party was moderately optimistic, declaring that its resources at the end of 31 December positioned the party to sustain its operations in 2020, with its administrative council saying it continued “to expect positive results for the foreseeable future.”

And despite concern on the impact of the pandemic, the PN administrative council optimistically said, “steps and initiatives taken to date are sufficient to safeguard the party’s financial position and the wellbeing of its employees.”

How party keeps pumping money in media company

But the PN’s accounts confirm the burden of Media.Link on the party’s finances.

Party accounts in fact show a €326,132 surplus which was turned into a deficit after the deduction of an “impairment expense” consisting of €928,258 on advanced amounts to “its controlled entities” – namely Media.Link and travel agency Eurotours.

The accounts show that by the end of 2019 the party’s contribution to Media.Link increased from €13.4 million in €2018 to €14.3 million in 2019.

The accounts state that “in view of the fact that the controlled entity is loss making and that the investment in the controlled entity has been fully impaired, no further share of losses were being recognised by the party, beyond the actual contributions.”

In the accounts these contributions are treated as being an extension of the party’s net investments. The party declared using the equity method for its investments whereby the share of results are recognised in the income and expenditure account “against the investment in said investment.”

Party repaying two major loans

The party also paid €444,196 in repayment of bank loans while registering €485,300 in proceeds from borrowing.

The accounts refer to two loans together amounting to €2.5 million, which the party has to repay. The first loan was obtained to restructure facilities previously owned by a controlled entity, and has to be repaid by 2034 in monthly repayments of €16,500.

A second loan “obtained to restructure the operations of the party and its controlled entities” is repayable in monthly instalments of €10,000 and has to be repaid by 2025.

The ċedoli scheme is listed as other borrowings amounting to €5.1 million, repayable in full at a rate of 4% interest at the expiration of a 10-year period commencing from the date of signing of each agreement.

More salaries, less income from membership

The accounts reveal that income from membership and subscriptions had declined from €112,658 in 2018 to €106,435 in 2019. The party also received €103,494 in funds from parliament to cover “parliamentary research”, €98,979 from rents on clubs and €175,000 in income from termination of club leases. The party only gained a measly € 428 from the sale of merchandise.

The accounts show that the party’s salary bill had increased from €425,179 in 2018 to €465,469 in 2019.

The party spent a total of €316,612 in its 2019 MEP elections campaign.

Party values property assets at €16 million

The party declared €15.9 million in property and other fixed assets. The party’s liabilities included €8.7 million in borrowing.

The party’s €9.8 in liabilities were offset by €17.6 million in total assets. The party’s properties were revalued “on an open market value” as at December 2019 which resulted in an increase of €1.5 million in the value of these properties over the previous year.

The party declared a €52,360 in profits from property sales down from €133,499 in 2018.

While the Labour Party still has to present its statement of accounts for 2019, Alternattiva Demokratika registered a €1,170 surplus while the defunct far-right Moviment Patrijotti Maltin registered a deficit of €2,564, down from a 2018 surplus of €7,302. The MPM’s major expenditure in 2019 was a truck expense of €2,070. The party had spent €1,985 in travelling and accommodation in 2018 and a further €817 in 2019.

Norman Lowell’s far-right Imperium Europa registered a €2,344 surplus in April 2020.