MIDI Group recorded a loss before tax of €2.1 million during 2023, as its financial performance was heavily impacted by the cyclical nature of its property development business.

The results were published in the Annual Report for the financial year ended 31st December 2023, published on Friday. MIDI Group is primarily involved in the development of the Manoel Island and Tigné Point projects, and is comprised of MIDI plc and its two subsidiaries, Tigné Contracting Limited and T14 Investments Limited. Through T14 Investments Limited, MIDI plc also holds a 50 per cent share in Mid Knight Holdings Limited. In 2023, MIDI Group resolved to amalgamate and merge the assets of former subsidiary Solutions & Infrastructure Services Limited (SIS) into MIDI plc.

During 2023, MIDI recorded €4.1 million in revenue, 19.2 per cent more than it did in 2022 (€3.4 million). €888,000 of this figure came from the development and sale of property (2022: €229,000), while the remaining €3.2 million was raised through property rental and management (2022: 3.2 million). The property rental and management segment includes the group’s rental operations of its Pjazza retail outlets and foreshore restaurants, car parking operations, operator concession fees raised from the Manoel Island Yacht Marina, and the operating activities previously undertaken by SIS.

MIDI stated that the performance during 2023 was impacted by two primary factors, one being the aforementioned cyclical nature of the property development business. While the group launched the apartments of its latest residential development at Tigné Point, known as Q3 – Fortress Gardens, the sale of these residential units will only be recognised once the final deeds of sale are entered into with the respective buyers. The response to the launch has been deemed “very positive,” with more than 70 per cent of the apartments now subject to a promise of sale agreement. The delivery of these apartments is envisaged for the second half of 2025.

A render of Q3 - Fortress Gardens / MIDI plc

Additionally, MIDI had no other inventory of residential apartments which it could deliver in 2023, and given that the financial results are very dependent on the contribution generated from property sales, the lack of revenue generated from this sector “invariably impacts negatively on the group’s overall financial performance.”

In addition to this, MIDI also said that it carried out its annual review of the carrying amounts of its investment property and inventory portfolio. After taking into consideration developments that have taken place over 2023, the Board of Directors concluded that it would be prudent to write down the carrying amount of inventory by €1.1 million to “reflect what it believes to be its estimated recoverable amount.”

Aside from that, administrative expenses for the year also increased by 16.9 per cent to €2.9 million (€2.5 million).

The resulting €2.1 million pre-tax loss in 2023 is relatively in line with that of the previous year.

Total assets increased from €231.9 million in 2022 to €254.7 million as at the end of 2023. The Board of Directors has also resolved to recommend the payment of a net final dividend of €1.9 million, equivalent to €0.009 per share. Should this be approved at the Annual General Meeting (AGM), the final dividend will be paid to shareholders on the company’s share register at the Central Securities Depository of the Malta Stock Exchange as at close of business on 28th May 2024 and payable on 19th July 2024.

Manoel Island development

MIDI Group stated that development of Manoel Island continues to play a “prominent part” in the group’s activities, and discussions with Government are ongoing with regards to the specific remedies available in the Deed of Emphyteusis that was entered into back in 2000. This was done to help mitigate, in part, the impact of the reduction of development volumes as a consequence of the discovery of archaeological remains on the Manoel Island site as well as an extension to the substantial completion date.

While the Planning Authority (PA) approved the outline permit for the revised Manoel Island masterplan on September 2021, the decision by the Environmental and Resources Authority (ERA) to approve the Environmental Impact Assessment (EIA) was appealed by a third party. This appeal was rejected in 2023, with the outline development permit now “definitively confirmed and not subject to further appeal.”

However, at the public hearing meeting on 14th March 2024, the Planning Board deferred the hearing of a full development application given that Manoel Island lies within the proposed buffer zone for the Valletta World Heritage Site (WHS) and was deemed desirable that a Heritage Impact Assessment (HIA) is commissioned.

MIDI Group stated that it is “confident” that the proposed development does not impact the status of Valletta WHS, and a decision on this application is expected during the second half of 2024 after the completion and submission of the HIA.

“In the meantime, site preparatory works are ongoing on the Manoel Island site under the supervision of an archaeological monitor. The company remains confident that the full development permit will be secured,” it continued.

MIDI Group remains engaged in discussions with Government in connection with the implications the delays and other developments which are outside the group’s control have on the timing and realisation of the project. On the basis of such discussions, the group stated that it is confident that an outcome which will enable the successful completion of the project “will be achieved.”