Portelli’s Mercury Towers goes €12.7 million under in 2024

One of the most lauded construction projects of the last decade – Joseph Portelli’s Mercury Towers – is not performing as well as projected.

Despite being almost entirely sold, it has registered a €12.7 million loss in 2024, according to the latest financial statements, audited by Baker Tilly Malta.

The group behind Mercury Towers in St Julian’s, Mercury Towers Ltd, drastically decreased its revenue in 2024, as property sales slowed. Delays continued to prevent the generation of profit from other segments, including the commercial mall and the hotel.

According to the company’s accounts, Mercury turned a €5.7 million profit in 2023 into a loss of €12.7 million in 2024.

Additionally, the company is heavily burdened with debt, both through loans with Bank of Valletta and the issuance of several interest-bearing bonds, totalling more than €223 million by the end of the year.

On the other hand, the company lists the value of its assets at €278 million, representing an increase of more than €35 million in a year, following a valuation exercise carried out by Edwin Mintoff Architects, which reflects the rise in the market value of the property.

Considering the valuation exercise a risk, the auditors obtained a second opinion. They concluded that the assets are listed according to their “fair value.”

The company, headed by Portelli, listed several reasons for the negative results, primarily attributing them to delays in project completion and underperforming profits from the hotel and other commercial branches.

The company’s board said it remained confident that the project would generate better income in the coming years.

According to the accounts, Portelli’s company has approximately €6.4 million in interest payments per year on its loans and outstanding bonds, almost double the amount of the loans financed in 2023.

Last year, the company, through its financial arm, Mercury Towers plc, issued approximately €20 million in new bonds to pay off some of its soon-to-be-maturing BOV loans.

The massive project, which includes the tallest building in Malta – a 33-storey tower – is being developed on a property once owned by the government and previously occupied by the former telephone exchange used by Telemalta – the state telephone agency privatised in the 90s.