MIA registers €29.7m drop in revenue when compared to 2019
Malta International Airport ended the first half of 2020 with a net loss of €2 million and a drop in revenue of €29.7 million when compared to the same period last year, due to measures imposed to combat coronavirus
by Paul Cocks
Malta International Airport’s total revenue in the first six months of the year decreased by 67%, from €44.6 million in H1 in 2019 to €14.9, as a result of measures imposed to combat the spread of COVID-19.
In its Interim Directors Report for the period 1 January to 30 June 2020, MIA says that it welcomed 1,017,850 passengers in the first half of 2020, resulting in a drop of 2,234,057 passenger movements and an overall decline of 68.7% when compared to 2019. MIA also registered a 51% decrease in revenues from the retail and property segment.
These decreases reflect the significant downturn in traffic resulting from a blanket ban on all commercial flights, which came into effect on 21 March. It resulted in a decrease of 73% in revenue from airport activity, from €31m in the first six months of 2019 to €8.4m in the same period this year.
MIA re-opened to commercial operations on 1 July 2020 with a limited flight schedule. Since then, the airport’s summer schedule has been updated regularly in order to reflect the most recent developments and, currently, offers direct connections to more than 70 airports.
A spokesperson for the company told BusinessToday that, having re-assessed the current situation and its adverse effects on the Group’s revenue generation, as well as taken into account the fluidity that still prevails, MIA is not in a position to provide dependable forecasts that can give accurate guidance to the market on the same basis as that given in January 2020.
And the Board of Directors, with a view to manage the company’s cash reserves in a moment of significant curtailment of cash inflows and in effort to preserve the Company’s organisational set-up and structures, decided it was not prudent to recommend the payment of an interim dividend to shareholders.
However, in the light of the gradual resumption of operations at the airport, the Board decided to re-instate full remuneration of all employees, including the Board itself, as of 1 August.
MIA’s operating costs during the first six months of the year were diluted by €4.3m (34.2%) when compared to last year as variable costs for customer services, security, maintenance and VIP products registered a double-digit decrease. Total expenditure during the period amounted to €12.4m, a decrease of €5.2m over last year.
Notwithstanding, EBITDA of the Group decrease by 90.5% over the previous year, from €27m to €2.6m, resulting in a net loss of €2 million.
MIA said that once all commercial flights were banned, it implemented several strict cost-cutting measures targeting an initial reduction of overall operating costs of 30%. The Board, including the CEO and CFO, took a voluntary 30% reduction in their renumeration. The company’s management team accepted temporary salary reductions of 25% and temporary salary reductions, bases on a four-day working week for April to July were agreed to by the unions.
To further preserve liquidity, MIA made drastic adjustment to its original capital expenditure for 2020, suspending all non-essential projects. It has now shifted its focus to the construction of the new multi-storey car park and the expansion of the cargo village, which were already at an advanced stage before the COVID-19 pandemic surfaced.
MIA’s directors said they have reason to believe that, with the measures taken so far and others which are planned should the need arise, the group is sufficuiently resilient to be able to sustain the current conditions and that it has sufficient resources to meet all of its financial obligations for 2020.
