Malita Investments, a property investment firm listed on the Malta Stock Exchange, saw its share price tumble to an all-time low of €0.41 – a 16.4 per cent drop from both its IPO price of €0.50 and its recent rights issue price – after the company announced it would not be issuing an interim dividend.

This marks the first missed dividend since the majority Government-owned company went public in 2012.

Malita Investments share price year to date (YTD)

The move came as a complete surprise to shareholders, who were assured in February 2024 that Malita intended to maintain a total gross dividend yield of 7 per cent.

At the time, Malita's Board stated that its policy is to pay an interim and final dividend each year,” promising to provide shareholders with “consistent dividend income".

That pledge formed part of a presentation delivered to investors ahead of a major rights issue meant to raise €33 million.

The equity increase was necessitated by the major cost overruns in the company's affordable housing project, under which is it bound to build and rent out 756 residential units.

Although initially estimated to cost €50 million, by late 2023 this had ballooned to €120 million.

The latest decision to scrap the interim dividend – a decision sure to generate backlash from Malta's income-hungry investing community – has now raised fresh questions about the company's financial health.

Malita Investments stated reason for withholding an interim dividend is that "cash flow requirements for its development projects have increased beyond original projections due to certain project delays and increases in project costs. These factors have necessitated a reassessment of the company's funding requirements and strategic approach."

Malita also admitted that it has exhausted its current credit facilities and is now in discussions regarding new loans. "However it is not currently in a position to draw down on these facilities," it said.

The cost overruns are compounded by significant delays, with the Luqa project of 267 residential units, initially slated for completion by December 2026, now only expected to be complete in 2028.

Malita further admitted that it is now "actively exploring strategic options."

The latest results paint a starkly different picture to that presented by outgoing CEO Marlene Mizzi in 2023 in a missive expressing her disappointment at not having her contract renewed.

While acknowledging the Government's prerogative to to select its representatives on the Malita Investments Board, Ms Mizzi said that "given the accomplishments in recent years and the success in overcoming significant challenges as Chair, it would be insincere of me to claim that the decision by the company’s largest shareholder, not to renew my position, did not take me by surprise, particularly since this decision was taken during a very sensitive juncture for the company.”

She continued: “I also leave a legacy of proper corporate governance, robust systems in place, and a healthy company with a solid financial future" – a statement that sharply diverges from the company’s current situation, where that promising future appears to be unravelling rapidly.

The Maltese Government holds a majority shareholding of 79.75 per cent in Malita Investment plc, which operates on an independent and commercial basis to contribute towards long-term investment development in Malta.

The company’s principal activities include the financing, acquisition, development, management and operation of immovable property, in particular, projects of national and/or strategic importance.

Malita owns the sites of Malta International Airport (MIA) and Valletta Cruise Port (VCP), and holds a temporary emphyteusis over the Parliament Building and Pjazza Teatru Rjal.