3rd Quarter Results (1146798)
November 10 2020 - 1:00AM
UK Regulatory
Global Ports Holding PLC (GPH)
3rd Quarter Results
10-Nov-2020 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Global Ports Holding Plc
9 Month 2020 Trading Statement
Global Ports Holding announces Q3 2020 and 9 month results
Global Ports Holding Plc ("GPH" or the "Group"), the world's largest
independent cruise port operator, today announces its unaudited results for
the nine months ending 30 September 2020.
Key Financials 9M 9M 2020 9M YoY Q3 Q3 YoY
& KPI 2020 2019 Chang 2020 2019 Change
Highlights e
CCY5
Passengers (m 1.3 3.7 -64% 0.01 1.6 -99%
PAX)6
General & Bulk 871 580 50% 288 122 136%
Cargo ('000
tons)
Container 133 155 -14% 42 50 -15%
Throughput
('000 TEU)
Total Revenue 84.1 84.1 91.5 -8% 29.9 36.9 -19%
($m)1
Cruise Revenue 53.8 53.8 46.1 17% 19.9 22.2 -10%
($m)7
Ex IFRIC 12 13.7 46.1 -70% 1.9 22.2 -92%
Cruise Revenue
($m)9
Commercial 30.3 30.3 45.4 -33% 10.0 14.7 -32%
Revenue ($m)
Segmental 20.6 20.6 66.3 -69% 3.7 27.2 -86%
EBITDA ($m)2
Cruise EBITDA 0.9 0.9 32.6 -97% (2.9) 15.7 -118%
($m)8
Commercial 19.6 19.6 33.7 -42% 6.7 11.4 -42%
EBITDA ($m)
Adjusted 16.5 16.5 61.0 -73% 3.0 26.2 -89%
EBITDA ($m)3
Segmental 24.4% 24.4% 72.4% 12.3% 73.7%
EBITDA Margin
Cruise Margin 1.7% 1.7% 70.6% -14.6% 70.8%
Commercial 64.8% 64.8% 74.2% 67.1% 78.0%
Margin
Adjusted 19.6% 66.7% 10.0% 71.0%
EBITDA Margin
Operating (26.2) 10.3 (6.6) 9.0
(Loss)/Profit
($m)
(Loss)/Profit (47.7) (14.8) (12.6) 0.9
for the period
($m)
Underlying 0.1 17.3 3.2 11.3
profit for the
period4
9M Dec
2020 2019
Gross Debt 575.1 453.0
Gross Debt ex 508.8 388.2
IFRS 16
Finance Lease
Net Debt 466.2 389.1
Net Debt ex 399.8 324.3
IFRS 16
Finance Lease
Cash and Cash 108.9 63.8
equivalents
Key Financials and KPIs
? Total consolidated revenues were $84.1m for the 9M period, down 8% yoy.
Excluding the impact of Nassau Construction revenues (IFRIC-12), total
consolidated revenues were $44.0m, down 52%
? Q3 Revenues fell 19% yoy to $29.9m, excluding IFRIC-12, Q3 Revenues
were $11.9m
? Q3 Cruise Revenue fell 10% yoy to $19.9m, excluding IFRIC-12, Q3
Cruise Revenue fell 92% to $1.9m
? Q3 Commercial Revenue fell 32% yoy to $10.0m
? Segmental EBITDA for the 9M period was down -69% at $20.6m
? Q3 Segmental EBITDA fell 86% to $3.7m
? Q3 Cruise EBITDA fell 118% to a loss of $2.9m
? Q3 Commercial EBITDA was down 42% to $6.7m
? Adjusted EBITDA of $16.5m for the 9M period down 73%
? Q3 Adjusted EBITDA fell 89% to $3.0m
? Cruise passenger volumes for the 9M period fell by -64%, Q3 volumes fell
by -99%, with only a few thousand passengers handled in the period
? Container Throughput was -14% and General & Bulk Cargo was +50% for the
9M period
? The increase in Gross Debt was principally a result of the issue of the
Nassau Cruise Port bond in the period
Emre Sayin, Chief Executive Officer, said:
"As 2020, a year the global cruise industry and many of us will want to
forget, comes to an end, the global cruise industry remains in near shutdown
and the outlook for 2021 remains uncertain for the sector.
While cruise activity has restarted in the Mediterranean and Asia, levels of
activity remain very low. As we head into Winter in the Northern Hemisphere,
the potential end of the significant travel restrictions in Europe cannot be
assessed with certainty due to the ongoing and even increasing impacts of
Covid-19.
In North America and the Caribbean, the cruise lines and cruise ports have
put in place extensive Covid-19 protocols and the industry is ready to set
sail once again. However, while the Centers for Disease Control and
Prevention (CDC) has effectively replaced its no sail order with a
"Framework for Conditional Sailing Order for Cruise Ships", we do not expect
there will be a meaningful return to cruising in the near-term.
The near-term outlook for the industry looks more challenging than we had
expected at the time of half year results in August 2020. The first quarter
is normally an important trading period for our Caribbean ports and no
meaningful cruise activity in this period will have a negative impact to
full-year 2021 trading. We continue to manage the Group carefully by
focusing on reducing costs and preserving cash during this difficult period.
We continue to work with all stakeholders towards the successful financial
close for the sale of Port Akdeniz. The successful conclusion of this
process will effectively complete our strategic ambition of creating a pure
play cruise port operator. While we continue to believe in the long term
strength of the global cruise industry, all stakeholders should remain alert
to the fact that the disposal of Port Akdeniz will occur during a period of
continued uncertainty around a meaningful return to cruising."
Disposal of Port Akdeniz
Following a period of exclusive negotiations, on 21st October 2020, GPH
entered into a conditional sale and purchase agreement to sell Ortadogu
Antalya Liman Isletmeleri ("Port Akdeniz") to QTerminals W.L.L.
("QTerminals"), a Qatari commercial port operating company, for an
enterprise value of $140m. The net cash proceeds for GPH from this
transaction at closing will be determined by deducting net debt and debt
like items of Port Akdeniz at closing as well as paying transaction-related
costs and taxes. A small portion of the purchase price will be withheld by
QTerminals and paid 12 months after closing of the transaction.
The sale remains conditional, inter alia, upon obtaining certain regulatory
clearances and approvals from various Turkish governmental authorities.
Management is focussing on the completion of this transaction. The
successful closing of the sale will be an important factor when addressing
the upcoming maturity of the $250m Eurobond due November 2021, for which GPH
continues to assess a range of options but no decision has been made on
timing and structure. An update will be provided when it is appropriate to
do so.
Management believes the Group has sufficient resources to withstand an
extended cruise shutdown into 2021. However, following the sale of Port
Akdeniz maintaining sufficient liquidity is pivotal to the Group's ability
to trade through this extended cruise shutdown, particularly as the threat
of a second wave of Covid-19 cases and a return to severe travel
restrictions sweeps across Europe.
Financial Review
? Operating loss of $26.2m for the first 9 months of the year compares to
an operating profit of $10.3m for 9M 2019. This was largely driven by the
$43.7m fall in Adjusted EBITDA. The operating loss is calculated as
Adjusted EBITDA after port operating rights amortisation expense of $27.2m
(9M 2019: $25.2m), amortisation of $9.0m (9M 2019: $9.7m) and one off
adjustments and non-operating expenses of $6.6m (9M 2019: $11.4m), the
majority of which were project expenses of $4.5m (9M 2019: $7.1m).
? Loss after tax for the period was $47.7 million (9M 2019: -$14.8m), due
to the operating loss and further driven by an increase in net finance
costs to $32.7m (9M 2019: $27.0m) and a decrease in income from equity
accounted associates to just $0.6m (9M 2019: $4.4m), while the losses in
the period generated a tax income of $10.6m compared to a tax expense of
$2.6m in 9M 2019. The increased net finance costs are due to non-cash loss
when revaluing the Eurobond debt, along with non-cash revaluation losses
on Turkish entities foreign currency dominated liabilities and the
increase in net interest expenses, including interest expense on IFRS 16
lease obligations, to $22.3m (9M 2019: $20.2m).
? Underlying profit for the 9-month period of $0.1m (9M 2019: $17.3m)
reflects the loss after tax in the period of $47.7m after adding back
amortisation of port operating rights of $27.2m (9M 2019: $25.2m) and
non-cash foreign exchange transactions of $19.6m (9M 2019: $5.0m),
non-cash provisional expenses of $1.9m (9m 2019: $2.0m) and subtracting
IFRIC-12 non-cash construction margin of $0.8m (9M 2019: n/a).
Cruise Port Review
Passengers (m 9M 9M 2019 YoY Q3 Q3 2019 YoY Change
PAX) 2020 Change 2020 (%)
(%)
Creuers 0.14 1.9 -93% 0.003 0.86 -99.7%
Valletta 0.047 0.7 -93% 0.007 0.32 -97.8%
Ege Port 0.007 0.2 -97% 0.000 0.12 -100%
Nassau 0.835 n/a n/a 0.000 n/a n/a
Antigua 0.256 n/a n/a 0.000 n/a n/a
Other Cruise 0.016 0.8 -98% 0.002 0.29 -99.5%
Ports
Total Cruise 1.3 3.7 -64% 0.011 1.59 -99%
Ports
? Cruise Revenue excluding IFRIC-12 for the 9 months fell 70% to $13.7m,
while Cruise EBITDA fell 97% $0.9m.
? Passenger volumes for the 9 months fell 64%, falling by 99% yoy in Q3.
The better relative performance in the 9M period vs Q3 reflects the first
time contribution from Nassau Cruise Port and Antigua in Q1 2020, before
the onset of the Covid-19 crisis.
? Q3 passenger volumes of just 11k passengers reflected the effective
global shutdown of cruise industry in the period and the very modest
return to cruising in the Mediterranean towards the end of the period.
? Q3 Cruise Revenue excluding the impact of IFRIC-12 collapsed by -92% to
$1.9m and Q3 Cruise EBITDA fell -118%, to -$2.9m.
? 2020 was a year that was meant to be transformational for the Group,
with our new Caribbean ports driving a step change in the scale of our
cruise operations. Unfortunately, the onset of the Covid-19 crisis turned
a year that promised so much into one of unprecedented challenges as the
global cruise industry effectively went into global shutdown.
? As previously disclosed the combination of our flexible cost base and
decisive action taken to reduce costs and conserve cash has helped to
protect the business and preserve cash during the Covid-19 crisis.
? As previously disclosed, all but essential maintenance capex was
suspended across the group in Q2 2020. However, Capex in the 9M period was
$64.2m as in our new ports in the Caribbean the investment programs
continued, financed by committed loans at Antigua Cruise Port and Nassau
Cruise Ports bond issued in May 2020. The total capex at these ports in
the 9M period was $57.8m of which $19.8m was spent during Q3 2020. The
investment into Nassau will continue throughout 2021 and into 2022,
however, the investment in Antigua into a new pier will be completed by
the end of this year.
Commercial Port Review
9M 2020 9M 2019 Yoy Chge
Port Akdeniz
General & Bulk Cargo ('000 tons) 835 445 88%
Throughput ('000 TEU) 94 119 -21%
Port Adria
General & Bulk Cargo ('000 tons) 37 136 -73%
Throughput ('000 TEU) 39 36 8%
Total General & Bulk Cargo ('000 tons) 871 580 50%
Total Throughput ('000 TEU) 133 155 -14%
? The performance at our Commercial ports in Q3 2020 largely reflected a
continuation of the trends experienced in the first half of the year.
? For the 9M period, Throughput Container volumes fell 14% and General &
Bulk Cargo volumes rose 50%
? Commercial Revenue and EBITDA for the 9 months were down 33% and 42%
respectively, to $30.3m and $19.6m
? Q3 Commercial Revenue and EBITDA fell 32% and 42% respectively, to
$10.0m and $6.7m.
? On 21st October 2020 GPH announced that following a period of exclusive
negotiations it had entered into a conditional sale and purchase agreement
to sell Port Akdeniz to QTerminals, a Qatari commercial port operating
company, for an enterprise value of $140m. The net cash proceeds from this
transaction will be determined by deducting net debt and debt like items
of Port Akdeniz at closing as well as transaction-related costs and taxes.
A small portion of the purchase price will be withheld by QTerminals and
paid 12 months after closing of the transaction.
? As previously announced, on 29 April 2019 the Competition Authority
notified Port Akdeniz, that it had commenced an investigation into Port
Akdeniz due to an alleged breach of Article 6 of the Law on the Protection
of Competition, Law No. 4054 due to excessive pricing concerns on certain
services. While the reasoned decision is yet to be received, Port Akdeniz
has been notified by the Competition Authority that an administrative fine
will be imposed. The administrative fine is based on the Turkish Lira
turnover of Port Akdeniz in the fiscal year 2019 and represents up to USD
1.5m at today's exchange rate. Port Akdeniz will file an administrative
lawsuit against a such decision of the Competition Authority and the
Group's lawyers believe that, based on precedents, such lawsuit has the
potential to revert the decision, however such process may take up to 18
to 24 months.
Balance Sheet
Gross debt at period end was $575.1m (31st December 2019: $453.0m), with
this increase driven largely by the issuing of the Nassau Cruise Port bond
in the period. As at 30th September 2020 net debt was $466.2m (31st December
2019: $389.1m). The Group's Net Debt/EBITDA ratio was 14.0x (FY 2019 4.3x).
Excluding IFRS 16 finance leases, the gross debt at the end of the period
was $508.8m (31st December 2019: $388.2m), net debt at the end of the period
was $399.8m (31st December 2019: $324.3m) and Net Debt/EBITDA was 12.0x. The
leverage ratio as per GPH's Eurobond remains above the incurrence covenant
of 5.0x. As an incurrence covenant, the impact is that incurrence of
additional debt at Global Liman and its subsidiaries and dividend
distributions from Global Liman are restricted.
Operating cash flow was $20.6m (9M 2019: $24.8m). The decline in operating
cash flow was driven by lower EBITDA partially offset by a working capital
movement that resulted in a positive cash flow of $11.5m in the period,
primarily as a result of the unwind in trade and other receivables in the
absence of cruise calls in Q2 and Q3 2020 and following the peak cruise
season in the Caribbean.
Net capital expenditure during the period was $64.4m, a significant increase
on the $5.9m incurred in 9M 2019. $57.8m was spent on the Caribbean ports in
Antigua and Nassau. $3.8m was spent across the rest of the cruise portfolio
earlier this year, with $2.0m spent in Barcelona on terminal improvements
and $1.5m in Valletta on investment into the waterfront infrastructure.
$2.7m was spent on capex at the Commercial ports, with the vast majority of
this spent at Port Akdeniz.
Outlook & current trading
The near term outlook for Cruise over the remainder of 2020 and 2021 is
highly uncertain and looks more challenging than the outlook at the time of
half year results in August 2020.
While a number of cruise lines have commenced sailing in the Mediterranean
and Asia, volumes remain very low. In North America and the Caribbean, there
remains uncertainty as to when cruising will recommence in a meaningful way.
The recent issuing of a "Framework for Conditional Sailing Order for Cruise
Ships" by the Centers for Disease Control and Prevention (CDC) provides a
more formal structure for the return to cruising. However, we do not expect
there will be a meaningful return to cruising in the near term.
The first quarter is normally an important trading period for our Caribbean
ports therefore no meaningful cruise activity in this period will have a
negative impact on our overall trading in 2021.
While from an operating cash flow perspective management believe the Group
has sufficient resources to withstand an extended cruise shutdown into 2021,
the successful sale of Port Akdeniz will effectively create a pure play
cruise port group during a period of continued uncertainty around a
meaningful return to cruising in 2021. Therefore, maintaining sufficient
liquidity is pivotal to the Group's ability to trade through this extended
cruise shutdown, particularly in the context of a Covid-19 second wave and
as a return to severe travel restrictions sweeps across Europe.
Conference call
A conference call for investors only will be held at 4.00pm today.
Please register in advance at:
https://us02web.zoom.us/webinar/register/WN_escuppCxR-KGEmZ0FMn2Vw [1]
Notes
1) All $ refers to United States Dollar unless otherwise stated
2) Segmental EBITDA is calculated as income/(loss) before tax after adding
back: interest; depreciation; amortisation; unallocated expenses; and
specific adjusting items including Nassau construction services margin
(IFRIC-12)
3) Adjusted EBITDA calculated as Segmental EBITDA less unallocated
(holding company) expenses
4) Underlying Profit is calculated as profit / (loss) for the year after
adding back: amortisation expense in relation to Port Operation Rights,
non-cash provisional income and expenses, non-cash foreign exchange
transactions and specific non-recurring expenses and income, as well as
non-cash margin from Nassau construction services (IFRIC-12) accounting.
Adjusted earnings per share is calculated as underlying profit divided by
weighted average number of shares
5) Performance at constant currency is calculated by translating foreign
currency earnings from our consolidated cruise ports, management
agreements and associated ports for the current period into $ at the
average exchange rates used over the same period in the prior year.
6) Passenger numbers refer to consolidated and managed portfolio
consolidation perimeter, hence it excludes equity accounted associate
ports La Goulette, Lisbon Singapore and Venice.
7) Revenue allocated to the Cruise segment is the sum of revenues of
consolidated ports and from management contracts
8) EBITDA allocated to the Cruise segment is the sum of EBITDA of
consolidated cruise ports and pro-rata Net Profit of equity accounted
associate ports La Goulette, Lisbon, Singapore and Venice, as well as the
contribution from management agreements
9) Revenue and EBITDA Ex IFRIC 12 refers to exclusion of the impact of
IFRIC 12 construction revenue accounting at Nassau Cruise Port.
Appendix
Consolidated statement of comprehensive income 9M 2020 9M 2019
data
Revenue 84.1 91.5
Operating Expenses (91.3) (61.6)
of which Depreciation and Amortization (36.3) (34.9)
Other Operating Income 2.4 3.0
Other Operating Expense (21.4) (22.6)
Operating profit (26.2) 10.3
Finance Income 16.5 5.6
Finance Expenses (49.2) (32.5)
Share of profit of equity accounted investees 0.6 4.4
Profit before income tax (58.3) (12.3)
Income tax expense 10.6 (2.6)
Profit for the period (47.7) (14.8)
Other financial data (USD millions actual)
Adjusted EBITDA 16.5 61.0
EBITDA margin 19.6% 66.7%
Cash flow (USD Million) 9M 2020 9M 2019
Net cash from operating activities 20.6 24.8
of which change in working capital 11.5 (14.7)
Net Cash used in investing activities (66.9) (2.9)
of which CAPEX (64.4) (5.9)
Net cash from / (used in) financing activities 92.4 (28.6)
of which interest paid (16.4) (14.1)
of which net dividends received / (paid) (0.2) (22.3)
Net (decrease) / increase in cash and cash 46.1 (6.7)
equivalents
Consolidated statement of 30.09.2020 30.09.2019 31.12.2019
financial position data ($m)
Cash and cash equivalents 108.9 66.2 63.8
(including short term
investments)
Total current assets 135.5 115.5 102.8
Total assets 879.4 699.8 794.9
Total debt (including 575.1 411.1 453.0
obligations under financing
leases)
Net debt (including obligations 466.2 324.3 389.1
under financing leases)
Total equity 124.6 171.2 155.3
of which retained earnings 32.5 74.4 61.1
CONTACT
For investor, analyst and For media enquiries:
financial media enquiries:
Global Ports Holding, Investor Global Ports Holding
Relations
Martin Brown Ceylan Erzi
Telephone: +44 (0) 7947 163 687 Telephone: +90 212 244 44 40
Email: Email:
martinb@globalportsholding.com ceylane@globalportsholding.com
ISIN: GB00BD2ZT390
Category Code: QRT
TIDM: GPH
Sequence No.: 87523
EQS News ID: 1146798
End of Announcement EQS News Service
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