Despite positive operating result for 2015.
Although Expo Milan 2015 closed the year with a net operating profit of over €14m, the board this week admitted that this sum would not cover the expenses still required to wind down the operation.
What the original results announced for last year did not show were this year’s costs for dismantling the pavilions and other structures, and the amortisation of some of the 2015 debit extending into the new year.
These additional expenses are running at around €4m per month, the board stated, which means that the cash in hand at the end of 2015 will soon run out.
Despite the rosy figures announced in January, the total loss generated by the exposition could run at between €30.6m and €32.6m, depending on the success of efforts to recover outstanding money owed the company.
The 2015 balance had in fact mentioned that at year’s end some €20m was still outstanding from ticket sales, and a further €50m from sponsorships. The report also pointed out that several expected contributions had not been paid, including €58.6m from Milan Chamber of Commerce, €7.4m from Milan province, and over €14m for increasing the level of security of the exposition.
Unless this money can be collected the continuing expenses will eventually have to be set against the capital of Expo 2015 SpA, with the danger that losses will rise to a level – one third of the capital – where recapitalisation is required by law.
The committee of liquidators appointed to wind down Expo2015 SpA, said the board, would look into what level of contribution Arexpo SpA, owners of the land and developers of the new “technopole” could make to cover the losses.
The provisional balance announced in January should have been discussed and approved by the board at the end of that month. That board meeting was however postponed until 9 February at the request of the economy ministry.
Media reports point out that this had the effect of concealing the true state of affairs until after the Partito Democratico primary elections for the post of mayor of Milan, which outgoing Expo commissar Giuseppe Sala won on 7 February.