Malta International Airport has issued a company update on the Malta Stock Exchange to announce that it is withdrawing a previous dividend recommendation in order to safeguard cash reserves while airports across Europe remain shut.

It also announced the suspension of non-essential capital expenditure, an initial overall operating cost reduction of 30 per cent, a cut in salaries of the Board of Directors - including the CEO and CFO, of 30 per cent and withdrew its 2020 growth forecasts made last January.

Shareholders will not receive their pay-out of €0.10 cents per share, as had been announced by MIA on 26th February.

“Having evaluated the overall position, the Board of Directors believes that with a view to manage the Company’s cash reserves in a moment of severe curtailment of revenue generation, and of maintaining the Company’s organisational set-up and structures in a state that would be able to recover immediately once the situation normalises, it is prudent to withdraw its recommendation for the declaration of a dividend, over and above the interim dividend already paid by the Directors in September 2019.”

Malta officially banned commercial flights on 21st March, while the duration of the crises and when, in particular, travel can resume, remains unknown. Health Minister Chris Fearne announced social distancing restrictions could be eased in the coming days, however it is presumed that the resumption of commercial travel is still some time away.

“The Company has evaluated several scenarios to enable it to assess the ramifications of the airport closure on the overall business and to identify measures that can be adopted with a view to mitigate the adverse impact on the Company throughout the duration of the current situation,” MIA said.

With regard to cost cutting, MIA said that an initial reduction in operating costs of 30 per cent will take place, while further cost cutting measures taken as the need arises.

Moreover, the MIA management team has accepted the company’s proposed salary reductions, effective from 1st of April 2020, which are expected to ease some of the pressure the Company is under due to the current crisis.

Drastic adjustments have been made to the capital expenditure programme. Last January, MIA had forecasted another bumper year for passenger movements, and announced the start of a €100 million terminal expansion project.

It has now suspended all non-essential projects while shifting focus to the completion of major projects, namely the construction of a new multi-storey car park and the expansion of the cargo village. MIA said such works had already began prior to the pandemic.

While renouncing growth projections for 2020, MIA said it has run several scenarios and believes with measures taken, it is able to weather the storm and meet financial obligations.

“We are confident that the measures announced today will enable us to manage the overall situation and our cash flows in a manner that puts us in a position to meet all the Company’s financial obligations during the current financial year,” said MIA CEO Alan Borg

“This unprecedented situation has dealt the aviation industry, not least Malta International Airport, a huge blow that we can only recover from if we continue to take timely measures, even if they may appear to be drastic or unpopular.

“I would like to appeal to our shareholders for their support and understanding at this time of uncertainty that has forced us to resort to measures that we never thought we would have to take.

“I would also like to thank the team at Malta International Airport and all other airport stakeholders for being nimble in adapting to the extraordinary needs of the Company brought about by the COVID-19 crisis, and appeal for their continued cooperation as we look ahead to better days,” said Mr Borg.