Stivala Group with real estate portfolio worth €354 million, €26.3 million profit in 2022

As at 31 December 2022, Stivala Group - spearheaded in part by Michael Stivala, president of the Malta Developers Association - owned a real estate portfolio with a carrying value of €354.3 million.

In 2022, the Group reported an increase in profit after tax of €13.9 million to €26.3 million (FY2021:€12.4 million), with EBITDA more than doubling to €21.1 million (FY2021: €10.4 million).

And for 2023, the Group is projecting to generate revenue amounting to €37.2 million, an increase of €8.4 million (+29%) when compared to FY2022.

According to the Group's Financial Analysis Summary published this week, this increase in revenue is a reflection of an improvement in performance expected from all operational sectors: hospitality, commercial leasing and residential rental sectors.

In addition, the Group is anticipating that it will sell all remaining residential units held as inventory by Carmelo Stivala Group Ltd.

As a consequence, the Group’s EBITDA is expected to increase y-o-y by €6.0 million (+28%) and register an EBITDA margin of 72.75% (FY2022: 73.26%). Interest cover is expected to strengthen from 5.61 times (FY2022) to 7.12 times.

In the forecast financial year, the Group estimates total comprehensive income to amount to €17.7 million compared to €30.7 million in the prior year. It should be noted that in FY2022, total comprehensive income comprised gains on disposal of subsidiaries of €7.3 million and uplifts in the carrying value of property of €9.1 million.

Carmelo Stivala Group Ltd is the guarantor of the bonds issued by the Issuer. It is the property holding company of the Group and is also the direct holding company of the operational entities within the Stivala Group.

ST Properties Ltd is principally involved in the business of sub-leasing, on a long-term basis, the commercial and residential properties owned by the Guarantor.

ST Hotels Ltd is primarily engaged in the operation and management of the Guarantor’s hotels, hostels and short let apartments.

The Group also has four associate companies as follows: (i) Platinum Developments Ltd (C 70581) - owns and leases three residential units and one office on the Sliema Seafront; (ii) Civala Limited (C 66336) – has a long term lease on a 900m2 plot of land earmarked for the future development of a five-storey car park and overlying office space; and (iii) Sliema Creek Lido Limited (C 87108) and AquaLuna Lido Limited (C 95143) – both involved in the management of a lido opposite the Bayview Hotel in Gzira.

Group properties in the course of development or held for future development include the ST Tower in Ta' Xbiex, St Alavits Hotel, Gzira (formerly the ‘Ponsomby Hotel and School’), Novotel Hotel, Gzira (redevelopment of the ‘Blubay Suites & Apartments’), Movenpick Hotel, Sliema (redevelopment of the Sliema Hotel), Montana Hotel, Gzira, a proposed home for the elderly in Gzira, Parisio Hotel, Gzira, Bayview Hotel, Gzira, and Charlie’s Guesthouse, Msida.

Early this year, the Group was also the sole bidder for the 65-year concession to rehabilitate and operate the Chalet site in Sliema.

The proposed project, if successfully awarded, will convert the site into a catering and entertainment establishment in accordance with the tender document.

FY2022 performance

The Group's revenue in FY2022 increased by €13.7 million (+91%) y-o-y to €28.8 million (FY2021: €15.1 million). The Group’s hospitality segment performed better compared to the prior year as the economy continued to recover from the pandemic.

This segment generated 46% of total revenue (FY2021: 43%). Rental income increased by €1.0 million from €8.4 million in FY2021 to €9.4 million (+12%). Aggregate revenue also includes an amount of €6.2 million generated from sales of residential units (FY2021: €0.2 million).

In consequence, EBITDA more than doubled to €21.1 million (FY2021: €10.4 million). The Group’s EBITDA margin improved by 4 percentage points on a comparable basis to 73%. In addition, the Group’s interest cover strengthened from 3.25 times in FY2021 to 5.61 times in FY2022.

The financial statements under review were impacted by one-off items which had a net positive effect of €13.5 million on the Group’s profit before tax. Such items include: (i) gains of €7.3 million on disposal of subsidiaries (Stivala Operators Limited and Stivala Properties Ltd); (ii) gains on revaluation of property amounting to €9.1 million; and (iii) provision for expected credit losses of €2.9 million.

As a result, the Group reported an increase in profit after tax of €13.9 million to €26.3 million (FY2021:€12.4 million). In other comprehensive income, the Group reflected an uplift in the carrying value of property, plant and equipment of €4.4 million.

Overall, the Group registered a total comprehensive income of €30.7 million compared to €42.7 million in FY2021.