Commercial properties owner and developer Malta Properties Company plc (MPC) registered €2.13 million in profit before tax for the first half of 2022, representing a 27 per cent decrease from the figures of the same period in 2021, it announced on Wednesday.
This came despite a rise of 5.7 per cent in total income over the six-month period ended 30th June 2022, driven by a €99,305 increase in rental income from the comparable period’s €1.82 million. This was primarily a result of the increase in rental income attributable to the rent received on the recently acquired MIB Insurance Brokers Building in Ta’ Xbiex, which was purchased by the group in March.
Conversely, the rental income rise was partially offset by drops in rents for Marsa Spencer Hill Old Exchange and Birkirkara Old Exchange which were vacated by GO plc during the first and second quarters of 2022 respectively. The Birkirkara building is set to be developed into a residential and commercial building by Excel Investments, the company owned by Gozitan developer Joseph Portelli.
Looking forward, the group expects rental income to continue increasing through the incremental rent received from the MIB property and upon completion of the Zejtun development.
Administrative expenses eased slightly by just over one per cent, while finance costs increased by almost 10 per cent at €336,842.
MPC recorded €1.07 million in gains from the revaluation of its investment properties, representing a sharp 45 per cent drop from the comparable period’s €1.93 million. The substantial difference mainly relates to the Birkirkara Old Exchange building which was fair valued in line with the sale price as was agreed during the sale.
During the first half of 2022, the value of MPC’s property portfolio increased by 14.3 per cent to €90.5 million, primarily due to the acquisition of the MIB property, continued development in Zejtun, Marsa Spencer Hill Old Exchange’s renovation, and fair value increase for the Birkirkara Old Exchange. Total assets for the period expanded by 8.5 per cent to €100.7 million, while total liabilities rose to €44.34 million from the second half of 2021’s €36.09 million.
Throughout the period, dividends paid to the parent company amounted to €729,436, after no dividend was paid in the prior period as it was approved for payment at the Annual General Meeting held on 15th July 2021.
The company's directors wrote that MPC has shown signs of resilience in its business operations during the global recovery of the COVID-19 pandemic, yet there is still a risk that the pandemic will have an impact on the overall real estate market rate, that could “to some extent impact the value of the MPC portfolio going forward”. The group will continue to monitor the market closely and see how it evolves, adapting its strategy accordingly.
The group stated that it “is in a solid position to grow further and continue to deliver results with its business strengths, its high-quality portfolio and a strong tenant base”.
MPC owns a portfolio of office buildings and industrial properties that are leased out to blue chip tenants with secure, long duration leases. The group’s tenants include GO, EPIC Communications Ltd, Planning Authority and HSBC Global Services, among others.
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