3rd Quarter Results (1146798)

 
 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: [phone]     Telephone: [phone] 
Email:                           Email: 
[e-mail]   [e-mail] 
 
ISIN:          GB00BD2ZT390 
Category Code: QRT 
TIDM:          GPH 
Sequence No.:  87523 
EQS News ID:   1146798 
 
End of Announcement EQS News Service 
 
 
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(END) Dow Jones Newswires

November 10, 2020 02:00 ET (07:00 GMT)