Air Malta registers €400,000 operating profit

Unaudited revenue and financial position figures were published yesterday by Air Malta for the April-September period of its current financial year, showing an airline operating profit of €400,000 compared to an €8 million operational loss for the same period last year.

The income statement for this period shows a loss after deducting restructuring and finance costs of €5.5 million; an improvement of €6.7 million over the €12.2 million loss registered during the same period last year. This was the first time in four years that an operating profit has been registered in this period.

Commenting on the statements, chairman Louis A. Farrugia said this is the second year running “that the airline has issued its half yearly figures. This is in line with the board of directors’ policy to announce Air Malta’s operating results every quarter.

The publication of these figures comes barely three weeks after the end of the period being reported. This reflects the improvements the airline is making, not only in terms of corporate governance, but also in updating the airline stakeholders, including the public, of the airline’s restructuring efforts.

“These interim results show that significant progress has been achieved at the operating level in cutting costs and increasing revenue; both essential steps that we need to be successful at if we are to secure the long-term profitability of the airline. I wish to thank all employees for their vital efforts towards these goals, and encourage them to continue to press forward with the massive change programme that is under way.”

Air Malta’s chairman emphasised the critical situation that the airline was in last year, and stated that it was essential to start implementing the plan with urgency and well ahead of the European Commission’s formal approval. “In fact several of the initiatives listed in this published plan have already been implemented, including the 20% reduction in capacity that was achieved by summer 2012. No further reductions in capacity or release of slots over and above what we have already implemented are envisaged,” he said.

Mr Farrugia underlined the recent initiatives taken at the end of September and early October to significantly strengthen Air Malta’s financial position. “As indicated in the commentary issued with the statements, the Air Malta board welcomes the recent takeup of new equity by the government. The government has further signed an undertaking to subscribe to the second share issue of new equity that is sched- uled to take place in January 2013.”

The first issue of shares took place in October 2012, under which the government subscribed to €78 million of new shares, and paid up the first call of 25.6%, amounting to €20 million.

The government has made a commitment to subscribe to the second share issue due to take place in January 2013 amounting to €52 million. In line with the first issue, the calls for these shares will be made on a phased basis in line with the plan.

In addition, the airline completed the sale of its head office site this month, further enhancing the company’s liquidity position. The sale of the property, which is the first tranche in the sale of the €66.2 million land portfolio, was sold for €26.7million. The net proceeds of this sale were €6.7 million, offsetting the €20 million deposit received in January 2012 at the time of signing the promise of sale agreement.