Stivala Group, a Malta-based group involved in the property and hospitality sectors, registered a profit before tax of €73 million in 2023, a substantial increase of 170.2 per cent from 2022’s figure (€27 million).
These results were released in the group’s Annual Report and consolidated financial statements for the financial year ended 31st December 2023, published recently.
Stivala Group is primarily active in the areas of property letting, development, and hospitality, with it owning and leasing a number of commercial, residential, and office properties. These include various apartments and hotels, namely Bayview Hotel, Blubay Apartments, Blubay Suites, Sliema Hotel, Azur Hotel, and ST Tower, the majority of which are located in Gżira or Sliema.
During the year, the group generated €33 million in revenue, up from the €28.8 million recorded in 2022. Stivala Group’s revenue is primarily derived from hospitality and rental income, and while the latter only increased slightly (2023: €9.8 million; 2022: €9.4 million), the performance of the hospitality business surged by 19 per cent. This was mainly a result of the lifting of restrictions tied to the COVID-19 pandemic.
Cost of sales and services amounted to €7.2 million, an increase of 17.4 per cent from 2022’s €6.1 million, mainly due to rises in direct wages, commissions, and repairs and maintenance costs. On the other hand, there was a substantial decrease in administrative expenses, with this going down from €9.6 million to €6.5 million.
A notable factor in the group’s substantial pre-tax profit figure in 2023 is the €42.4 million classified under other operating income (2022: €1.2 million). While this included €4.5 million in a decrease for estimated credit losses and €834,127 in recharge of utilities to tenants, among other income, the majority of the figure was a result of €36.5 million termed as profit on recognition of intangible asset.
When contacted by WhosWho.mt for further details about this €36.5 million, Stivala Group stated that it comes from the “capitalisation of the brand value derived from the hotel business trading under the name of ST Hotels.” The value was determined through an income approach, based on the brand name’s future prospects for cash flow generation. Stivala Group said that the valuation was prepared “at arms’ length by warranted third parties and referenced to industry standards and best practices,” including those issued by the International Valuation Standards Council.
Aside from that, the group also had €15.4 million in income brought in due to change in fair value of investment properties, after a valuation exercise of the properties owned by the group was commissioned to Falzon & Cutajar Architects & Civil Engineers.
Stivala Group’s total assets expanded significantly during the year, going up from €396.6 million to €469.7 million. The Board of Directors did not recommend the payment of a dividend, with €67.1 million in retained profits being carried forward at the reporting date.
In addition to the financial results, the group also provided an update on its current and future developments, stating that despite economic uncertainties posed by high inflation and higher interest rates, it still started 2023 with an “upward trend” in hospitality revenue. The property letting and development sector “continues to operate normally,” with the Msida Park Residence being fully occupied.
In his report, Chairman Ivan Stivala remarked that the final stages of construction are underway for ST Tower, a high-rise commercial property located in Ta’ Xbiex, with it set to open by the end of June 2024. “This development will enrich our property portfolio and substantially enhance our revenue stream,” Mr Stivala continued.
He also referred to the opening of Alavits Hotel in Gżira last June, stating that it has “exceeded expectations, outperforming projected occupancy rates.”
Mr Stivala added that the construction of the first Novotel Hotel in Malta, located in Gżira and announced a few years ago, is “progressing rapidly” and is earmarked for completion by the first quarter of 2025. The four-star 300-room hotel, which will be developed instead of Blubay Suites and Apartments, is expected to be open to the public in the second quarter of that year. “With the increasing demand for affordable, yet high-quality hotel accommodation, we anticipate positive feedback from the market for this project,” he affirmed.
Looking ahead, both Mr Stivala and Stivala Group as a whole expressed their optimism for 2024, pointing towards the group’s upcoming projects as factors that will solidify its position in the tourism industry.
Main Image:Stivala Group's ST Bayview Hotel / Booking.com
