VBL, the real estate developer and hospitality company focused on Valletta, has recorded a significant increase in revenue as tourism kicked back into gear in the second quarter of 2022, driving a turnaround in its earnings before interest, tax and depreciation (EBITDA) from a negative €0.21 million in the first half of 2021 to a positive €0.05 million in the first six months of this year.

However, when factoring in financing costs, the group registered an operating loss of €0.13 million for the reporting period, down from the net loss of €0.42 million incurred over the same period of last year.

VBL’s directors explained that the fast pace of recovery seen between January and June of 2022 was counterbalanced by Government restrictions related to COVID-19, which had a negative effect on the hospitality sector in the first quarter of the year.

Other factors affecting the group’s performance were “significantly reduced” passenger capacities in airlines operating flights to and from Malta, along with cost increases and disruptions related to the war in Ukraine.

The company, the directors note, was able to retain almost all of its commercial clients, and was successful in attracting new long-term tenants since the beginning of the pandemic.

Revenues, which reached €895,000 during the period, saw an increase of 315 per cent over those recorded for the corresponding period of 2021. The vast majority of these revenues came from VBL’s hospitality ventures, with only 16 per cent not related to the sector.

The directors also drew attention to several considerations to keep in mind when reading the financial results for the first six months of 2022.

Most important, investment income arising from revaluations of its properties, the vast majority of which are still under renovation, is not included in the half-yearly results, since such revaluation takes place on an annual basis.

“If these [revaluations] were to be recognised at half-year term,” the directors note, “then the bottom line figures are likely to be positive.”

Capital expenditure has also been reigned in as a preventative risk management measure, due to market uncertainty. This, they say, is not expected to have a major impact on expected timelines, though “smaller delays could be experienced”.

Looking forward, the directors take a cautiously optimistic view of the company’s outlook, taking heart from the rapid post-pandemic recovery of its financial performance, boosted by a strong tourism recovery.

VBL also noted that it has sufficient liquidity to support stable and undisrupted operations, leading it to conclude that the year-end projections are “realistic, and not overly ambitious”.