Malita investments plc has reported a 1.2 per cent increase in profits and recommended a final net dividend of €2,098,691 or €0.0142 per share.

The 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.

It is also currently involved in a major housing project, developing around 700 apartments and almost 300 garages for the Government’s affordable housing stock.

In its financial statements, posted to the Malta Stock Exchange, Malita reported operating profit of €8,124,716, an increase of 2.5 per cent when compared to the €7,927,807 reported in 2019.

Ground rent on the Valletta Cruise Port is partly dependent on the revenues deriving to VCP from the letting of buildings and facilities as well as from passenger and cruise liner operations.

As at 31st December 2020, Malita is due to receive an additional amount of rent of €282,009 in relation to the prior year where the percentage revenue arising from other activities was higher than the set minimum annual ground rent due.

The company’s 2020 results were impacted by a negative movement in the fair value of the MIA and VCP properties of €1,440,000 and a positive movement in the fair value of the Parliament Building and Open Air Theatre of €6,042,762.

The negative fair value movement for MIA and VCP properties came about due to the upward movement of interest rates, whereas for the Parliament Building and Open Air Theatre, the upward movement of interest rates was offset by the changes in the contractual cash flows owing to the passage of time.

On 28th June 2017, the Company entered into two credit facility agreements with the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB) for a 25-year term amounting to €53,700,000 to finance the construction of a number of affordable housing units in Malta.

Pursuant to this agreement, on 29th December 2017 the Company entered into an emphyteutical deed for 28 years with the Housing Authority to acquire 16 property sites in a number of locations across Malta to be used by the Company for the purposes of developing the affordable housing units.

In September 2018, the Company entered into 16 availability agreements with the Government whereby the Company will make available 16 property sites in a number of locations across Malta for a period of 25 years once complete. The number of units that will be made available amounts to 768. During such period the Company will lease the residential units on these development sites for affordable housing purposes.

Malita reports that the Affordable Housing project is proceeding “considerably well”.

“The COVID-19 pandemic impact has been minimal as no restrictions were imposed on the construction activity,” it said.

“Tenders for the construction of fourteen property sites have been awarded so far and construction works are close to completion on some of the sites.”

The capitalised cost to date on this development amounts to €18,868,800 and is reflected in the 2020 financial statements.

The Company said that it secured financing for the project based on initial estimates, but “significant variations” to the initial plans for various sites and additional number of units have “necessitated an increased estimated spend which has been approved by the Project Board”.

“The Board is confident that the necessary financing will be obtained to finalise the construction and finishing phases of all mentioned sites,” it said.

The Directors recommend the payment of a final gross dividend of €3,228,756 or €0.0218 per share (December 2019: €3,228,756 or €0.0218 per share), equating to a final net dividend of €2,098,691 or €0.0142 per share (December 2019: €2,744,442 or €0.01853 per share).

An interim gross dividend of €1,955,026 or €0.0132 per share resulting in an interim net dividend of €1,270,767 or €0.0086 per share was paid on 23rd September 2020.