Bortex Group has registered a loss of €1,173,332 for 2020, with strong real estate sales of €2.7 million largely offset by a provision for future write-offs of €1.9 million.

The Group said it had been an exceptional year, with the COVID-19 pandemic and its consequences severely impacting the various sectors of the Group’s activities on different levels and leading to a substantial decrease in projected revenues and consequently the final results.

Bortex Group owns a number of subsidiaries involved in the retail and distribution of branded products in Malta as well as internationally, contract garment manufacturing, hospitality, real estate development and property management.

It registered earnings before interest, taxation, depreciation and amortisation (EBITDA) of €2.1 million, down from the €2.3 million for 2019, and a profit before tax and non-recurring items of €759,761, compared to a profit in 2019 of €664,581.

This was due to the sale of 15 apartments out of 20 in Project TEN in Sliema which materialised during 2020, providing a net positive impact of €2.7 million.

However, an extraordinary provision for any possible future write-offs of €1.9 million led to a lotal loss before tax for the year after non-recurring items of €1,173,332.

The Group was on track to achieve its goals during the first part of the year, it said, although the onset of the COVID-19 pandemic brought retail and manufacturing revenues to “an almost complete halt”, with all stores in Malta and the Group’s factory in Tunisia forced shut.

The Group responded by converting its local manufacturing facility to the production of medical apparel and face masks, ramping up its online efforts, and embarking on a restructuring plan, decreasing its total overheads by more than 20 per cent.

It also shortened the working week for all employees for a number of months and qualified for Government support mainly via wage supplements.

Two Gagliardi retail stores in Sweden and one in UK were also closed permanently.

Operations started up again in early May and sales recovered slowly throughout the early summer, dipping again after the decision to prohibit events such as weddings.

The Group experienced a drop in retail sales of approximately 37 per cent throughout the year and a drop in manufacturing sales of 18 per cent when compared to pre-COVID budgets.

The Group’s hospitality business was also hard hit by the pandemic, with both Hotel 1926 and Palazzo Jean Parisot being forced to close down in March after starting the year on “excellent footing”.

After reopening in July, both hotels exceeded average industry occupancy rates, with the Group considering the outcome “a significant achievement” given the scenario.

COVID-19 had fewer repercussions on the real estate division of the Group since the majority of the apartments in Project Ten were already covered by a promise of sale agreement. The Group sold 15 apartments and 28 car spaces by the end of the financial year, which brought in €6.8 million in revenue net of commissions payable, with a profit of €2.7 million.

The Group’s rental income from the properties in Mrieħel and Sliema were not impacted by the COVID crisis.

Based on the financial results of the year, Bortex Group’s directors do not recommend the payment of a dividend, proposing that the company’s balance of retained earnings amounting to €2,344,521 be carried forward to the next financial year.