Mercury Projects Finance plc, the publicly listed company behind the Mercury House development in St Julian’s, has posted a gross profit of €6.97 million on the back of €19.8 million in revenue from the sale of constructed apartments and floors in its landmark property.
A revaluation of the building also boosted the company’s balance sheet by €24.5 million, leading to an operating profit of €30.6 million.
In its annual financial statements, posted to the Malta Stock Exchange, sole director Joseph Portelli said that works on the development had progressed within the constraints of the pandemic.
The Group meanwhile continued to sign new preliminary agreements, whilst the majority of deeds of sale were signed during the financial year under review as construction of the floors was completed.
Revenue is registered once the deeds of sale are signed, with brisk business conducted during 2020 leading to an increase in revenue to €19.8m, up from €9m in 2019.
The increase mainly results from the fact that during the financial year, a higher number of floors were completed which in turn resulted in larger execution of deeds of sale.
Cost of sales for the year under review amounted to €12.8m, as compared to €7.4m the preceding year.
The Group is also building and will be retaining certain areas of the property for eventual operation by any subsidiary to be formed for that purpose.
The Mercury House site consists of a plot of land measuring approximately 7,701 sq. mt. The site is located at one of the main gateways into Paceville, Malta’s main entertainment area, known for its vibrant and diverse nightlife, restaurants, casinos and luxurious five-star tourist accommodation and residential complexes.
This property includes two Grade 2 buildings, namely Mercury House, a 19th-century villa constructed on two floors and a basement, and underground cold war vaults.
Both structures are in the process of being restored and rehabilitated and will form an integral part of the development of the site.
The vision for the project is to create a high-quality landmark development through a combination of residential, retail, parking, hotel and substantial public open spaces that is intended to upgrade the amenity and contribute to the public realm of Paceville.
World renowned architect Dame Zaha Hadid had sketched this project herself, and it was her last design before her untimely demise. Zaha Hadid Architects were thereafter entrusted with the design of the project.
The approach provided by Zaha Hadid Architects is that of the provision of an iconic building to create a clear visual identity and sense of place for the site, thus bringing positive changes to the site and its surroundings.
Works on the development progressed well, with the tower forming part of the Company’s project being completed in shell form.
This tower consists of a 31-storey building above ground which twists on itself at levels 10, 11 and 12, described by Mr Portelli as “perhaps the most difficult engineering structure of the entire project”.
A permit for the addition of a further three floors was obtained on the 17th December 2020.
The Group said that the project is now entering the second stage, which involves the finishing of the building.
It stated that to date the funding of this project has mainly emanated from proceeds of sold units, which stand at 97 per cent of total units for sale prior to the approval of the additional floors.
The director assessed the effects of COVID-19 on the Group’s operations and noted that the Group continued to operate, even during the more challenging months of the pandemic.
While acknowledging that certain elements of construction were impacted, the Group stated that, given the continuous lifting of the COVID-19 related restrictions, it is confident that it would continue to manage the situation.
“The Group will continue monitoring developments in relation to the COVID-19 and is coordinating its operation response based on its business continuity plan and on guidance from health organisations, government, and general pandemic response best practices,” it said.
Mr Portelli is confident that, notwithstanding the current circumstances and project delays experienced so far, the Group will be able to operate through the prevalent market conditions.