Palm City leases gives Mediterranean Investment Holdings income upturn

Mediterranean’s €229,000 loss, compared to 2009’s loss after tax of €1,050,303, was a substantial reduction resulting from the income generated from the leasing-out of units at Palm City Residences.

Administrative expenses increased to €676,381 (2009 – €244,121) due to the fact that in 2009 a significant portion of this category of costs was capitalised while the project was still under construction.

Similarly, finance costs also increased from €755,821 in 2009 to €1,735,089 in 2010 mainly as a result of a lower capitalisation of such costs.

The excess of current liabilities over current assets of €20 million as at 30 June 2010, which also includes €8.4 million in bank loan repayments, will be generally covered by the remaining drawdown of available and approved long-term bank facilities and the generation of cash from operations.

On 14 June 2010 the Company obtained the MFSA approval to issue a new bond on the local market for a maximum of €40 million. This bond was principally aimed to finance the Company’s equity participation in Medina Tower - a major development project in which the Group will hold a 25% stake.

Subscriptions for this bond opened to the general public on the 12 July 2010 and closed on the same day due to over-subscription.

The Palm City project in Libya is now practically complete and fully operational. Throughout the last six months, occupancy levels have increased sharply and significantly as keen interest was shown by clients viewing the unparalleled lifestyle on offer.

With over 50% of the units leased out to various international corporations, Palm City has already achieved and exceeded the leasing targets for the first six months. Various leases are currently under negotiation and Palm City Limited plans to lease as much as 90% of the units by year end.

It is expected that by the end of 2010, the Group’s consolidated Income Statement will show a profit after tax.

During the period under review, MIH has been actively engaged in setting up Medina Tower Joint Stock Company in Libya. MIH will own 25% of this company together with IHI as another 25% shareholder and EDREICO owning the other 50%.

Substantial progress has also been achieved on the commencement of the early works on site as the design is now complete while two of the most significant tenders, namely those for the sub-structure and the super-structure, have been issued. Both tenders are expected to be awarded by the end of October 2010 with commencement of works set to take place shortly after. It is envisaged that this project will be completed in forty four months.

MIH has also appointed two directors to the board of Medina Tower, namely Mr Reuben Xuereb as Managing Director and Mr Joseph Fenech as a Non-Executive Director.