A fruit harvesting year: Performance across all major business lines well ahead of inflation and guidance…

Global Investment Holdings (“GIH”), a diversified conglomerate operating in 14 different countries across 4 continents, announced its full year consolidated results which ended 31 December 2022, and commented on recent developments.

Global Investment Holdings reported Consolidated Net Profit of 1,172.0mn TL in FY 2022, compared to a net loss of TL 111.1mn in FY 2021. Consolidated Net Revenues (excluding IFRIC 12 Construction Revenue) surged by 300% in FY 2022 over FY 2021, reaching TL 7,175.5mn; while Consolidated Operating EBITDA rose 493% to TL 2,520.9mn in the same period.

Global Investment Holdings’ Chairman & CEO, Mehmet Kutman, stated:

“I would like to start with my sincere condolences for all our citizens who lost their lives in the earthquake that occurred on 06.02.2023. Our prayers are with their relatives and our nation, and we wish a speedy recovery to our citizens who were affected and injured by the earthquake. We as a country are going through very difficult times and in an effort to help bind up the wounds, all of our Group Companies have been working in coordination with the public institutions and civil society organizations, aiming to directly deliver natural gas, prefabricated containers, fuel, food, water and various other needs to those in need since the early moments of the earthquake; while also taking part in permanent housing, school, hospital projects and such.”

The Chairman moved to the results: “2022 has marked itself a challenging but a successful transitional year; a very successful year in many respects despite the inflationary pressures due to increased energy and commodity prices driven by geopolitical tensions and compelling macroeconomic effects. I am pleased to report that, in 2022, our performance across all major business lines was well ahead of inflation as well as guidance figures and that our expansion continues. In 2022, we completely left the financial effects of the Covid 19, going back to normal and even exceeding 2019 numbers while generating positive bottom-line throughout the entire year. The ongoing accelerated growth continued into the fourth quarter of 2022, translating into 300% and 493% growth in consolidated revenues and EBITDA, respectively; and TL1,172.0 mn consolidated net profit for the full year 2022 (as opposed to TL111.1mn net loss in FY 2021). Our major business lines, with gas and ports businesses contributing the most, demonstrated superior performances in FY 2022. I am having the pleasure to underline that we have emerged out of the pandemic stronger with an expanded ports portfolio on a wider geography, deleveraged balance sheet, successful IPOs of our gas and power generation businesses, dividend upstream and such.”

The Chairman emphasized, “All our major companies are profitable, and we continue to expect good dividend flow from them, which we will continue to use to deleverage.”

The Chairman continued: “Our cruise port operations returned to normal and is continuing to accelerate with higher occupancy rates driven by strong demand. Booking volumes are now well above 2019 levels and 2023 booked position is well within historical range. There is a dramatic improvement over 2021 at our 27 cruise ports across 14 countries. The number of ships calling at our ports and the total number of passengers visiting our ports are back to or above pre-Covid levels. Occupancy rates for the cruise ships continued to improve, averaging between 90-95%; while in the Caribbeans, occupancy rates were around 100% and above in Q4 2022. Cruise demand is so strong that, according to Cruise Industry News, the industry expects a robust 18% growth in 2023 YoY in passenger capacity worldwide. In a five-year horizon, worldwide fleet is expected to expand to 494 ships in 2027 from 421 ships in 2022. Likewise, worldwide passenger capacity is expected to increase to 37.0 million in 2027 from 26.5 million in 2022.”

The Chairman added, “We did and will continue to make incremental additions to our port network. In Q1, we had added Tarragona Cruise Port in Spain and Crotone Cruise Port in Italy to our network and in Q2 we had received final acceptance for the concessions for three cruise ports in the Canary Islands: Las Palmas de Gran Canaria, Arrecife (Lanzarote) and Puerto del Rosario (Fuerteventura). In Q3, we had signed a 30-year concession agreement with the Puerto Rico Ports Authority for San Juan Cruise Port, Puerto Rico, marking a significant development in our strategic ambitions in the Caribbean. In Q4, we signed a Memorandum of Understanding (MoU) with the Government of St Lucia for a 30-year concession, with a potential 10-year extension option for the cruise related operations in St Lucia. Furthermore, an important milestone and a step-change in our global reach presented itself with Prince Rupert Cruise Port in British Columbia, Canada, for which we signed a 10-year concession, with a 10-year extension option, with the Port Authority to manage the port’s cruise services. Prince Rupert Cruise Port is GPH’s first cruise port in North America. Last but not least, following a public tender process, the Port Authority of Alicante has awarded preferred bidder status to an 80:20 joint venture between GPH and its local partner Sepcan S.L, to operate a 15-year cruise port concession for Alicante Cruise Port in Spain. The consortium and Port Authority of Alicante will now work towards agreeing on the terms of the concession agreement, with the consortium currently expected to take over operations at Alicante Cruise Port in the first half of the calendar year 2023. By the end of 2023, I expect our network will have expanded to over 30 ports, and that construction of our facilities at the key port of Nassau to have been completed.”

The Chairman added: “Following its successful listing in 2021, Naturelgaz (our compressed natural gas distributor) has had another solid year, with volumes rising further. As its share of the Turkish non-pipe CNG distribution is now 83% and its share of the Turkish non-pipe CNG+LNG is 32%, organic growth has slowed somewhat compared to say 10 years ago, but market share gains were still very strong – an improvement of some 5-6 percentage points over 2021 & beating all estimates by a wide margin.”

The Chairman continued: “I am proud to say that our power generation subsidiary, Consus Enerji (operating in renewables and distributed power) successfully completed its IPO process in April 2022, marking a major milestone in its history. Such IPO brought us closer to our goals to list all operational companies under Global Investment Holdings’ umbrella, ensuring profitability hence dividends to our shareholders and adopting and introducing best practice transparency and corporate governance principles across the Group. Consus continues to expand, especially in its solar energy business, and projects are slated for European and Caribbean countries.”

The Chairman continued: “Our mining arm, Straton, had a mixed performance over the Covid period, but recovered smartly in 2021. Unfortunately, 2022 is proving to be more challenging, a situation we expect will continue through to mid-2023.

The Chairman added: “Ardus Gayrimenkul Yatırımları A.Ş., 100% subsidiary of GIH has sold its shares in Pera Gayrimenkul Yatırım Ortaklığı A.Ş., previously a subsidiary of GIH and GIH has sold its shares in Pera Gayrimenkul Yatırım Ortaklığı A.Ş. As a result, GIH has no direct or indirect shares left in Pera Gayrimenkul Yatırım Ortaklığı A.Ş. The same trends stated above, together with the strong rise in consumer expenditure in Turkey (third quarter GDP figures indicate a near-20% rise) means that our shopping center and real estate arm has had an even stronger recovery than we forecast, which again we expect will continue into the first half of 2023.”

The Chairman concluded: “Naturelgaz outperformed all estimations and left a great year behind. Beyond doubt 2022 was the Gas year. We will witness GPH’s strong come back in 2023 as the industry fully recovers and we will keep adding new destinations to the portfolio. I already call 2023 as the Port’s year.

We have been investing in technology startups for quite some time now and have also created our own investment vehicle. By placing all our subsidiaries operating in the financial sector under one umbrella we have created a sizeable financial products and services subsidiary which is called GFS Holding A.Ş (previously GYH Danışmanlık ve Yönetim Hizmetleri A.Ş.) We are planning to list GFS on the stock in the last quarter of 2023 or in the beginning of 2024. I believe 2024 will be the Finance year for our Group.”

Commenting on the results, the Chief Financial Officer of Global Investment Holdings, Ferdağ Ildır, stated:

“I am pleased to state that 2022 has been a very successful year for our Group to fully recover and emerge even stronger from the pandemic and its negative effects on our businesses. Each and every quarter, we delivered outstanding set of results despite all the challenges in the macro environment. As discussed in the prior quarters, we have been taking major effective steps to reduce the debt burden since 2021. An extensive process including the listing of our subsidiaries Naturelgaz and Consus Enerji, the sale of our commercial port in Antalya, and the capital nearly by half in the last two years. Meanwhile, profitability was remarkably boosted in 2022 thanks to the bolstering activity in all of our business lines, especially the return of our cruise port operations business at full speed. As a result, our Net Debt / EBITDA dramatically improved, declining further to 3.8x at Q4 2022 on consolidated basis from 4.3x at Q3 2022 (2021 YE: 11.6x). Hence, with a deleveraged balance sheet, dividend upstream and strong operations from our subsidiaries, we are positive for 2023 as presented in our guidance; while prioritizing dividend distribution after a successful and profitable recovery period.”

Global Investment Holdings reported 7.2 bn TL revenues (excluding IFRIC-12 Construction Revenue) in FY 2022, indicating a robust 300% increase yoy with strong contribution from all business divisions, with the gas division and the port division contributing the most. The improvement in revenue generation has gained stronger momentum in Q4 2022 (Sep-Dec), more than tripling YoY, in line with strengthening activity in underlying businesses.

Global Investment Holdings’ consolidated operating EBITDA soared by 493% in FY 2022 yoy and reached 2.5bn TL, driven by a solid contribution from all business divisions, with the Ports and Gas division contributing the most.

GIH reported a consolidated net profit of 1.172mn TL in FY 2022, compared to a net loss of TL 111.1mn in FY 2021. The bottom line incorporated TL 864.9mn of non-cash charges of which TL 736.2mn was depreciation and amortization, and TL 128.7mn in net foreign exchange loss.

Meanwhile, TL 1.123mn one-off income included project expenses and IFRS related adjustments such as non-cash valuation gains from investment properties.

Depreciation and amortization charges, increased from TL 394,4mn in FY 2021 to TL 736.2mn in FY 2022. If the FX rate had remained the same as FY 2021 average, depreciation and amortization expense would have been TL 341.8mn lower.

The Group’s net interest expenses increased from TL 276.5mn TL in FY 2021 to TL 626.8mn in FY 2022. If average FX rate had maintained its FY 2021 level, net interest expense would have been TL 239mn lower than the reported figure in FY 2022.

On a divisional basis:

Naturelgaz maintained its solid financial position and recorded significant growth in FY 2022. Sales volume reached 227.9mn Sm3 in FY 2022, representing an increase of 12% yoy. Citygas sales, whose share in the total sales volume increased gradually in 2021, continued its rapid growth in FY 2022 as well. Citygas sales volume increased by 54% yoy, reaching 70.1mn Sm3. Revenues increased by 441% yoy in FY 2022, reaching TL 3,7 bn, reflecting the increase in sales volume especially in Citygas, Bulk CNG and the increase in gas prices. Gross profit reached TL971.8 mn in FY 2022, representing an increase of 609% yoy, based on company standalone financials. EBITDA increased by 801% yoy in FY 2022, reaching TL 892mn. The decrease in seasonality thanks to the increase in Citygas sales volume, effective cost management, and the effects of price differentials due to the higher-than-expected increases in natural gas price index contributed significantly to the EBITDA growth.

Profit before tax, which was TL 30.2mn in FY 2021, increased to TL 776.9mn in FY 2022, based on company standalone financials. Naturelgaz’s net cash surplus amounting to 192,6mn TL as of September 30, 2022, increased to TL 335mn net cash surplus as of December 31, 2022. In addition, Naturelgaz distributed a gross dividend payment of TL 35.8 mn to shareholders on May 9, 2022.

On the ports side, Average occupancy rates in the sector improved to 90-95% during Q4 2022. In the Caribbeans, occupancy rates exceeded 100%. While the average occupancy rates of the cruise ships visiting GPH`s consolidated ports in January 2022 was 42% only, it continued to increase gradually over the months and reached 98% in December 2022. Number of calls at GPH`s consolidated ports in Dec 2022 reached 94% of Dec 2019 (prepandemic) levels, while number of passengers visiting GPH`s consolidated ports in Dec 2022 standalone was 20% higher than 2019 levels. The ports of the Canary Islands (Las Palmas, Lanzarote and Fuerteventura) have been included in the calculation starting from Oct 2022, which was one of the main drivers for such increase in passenger numbers. In FY 2022, total consolidated passenger numbers reached 83% of FY 2019; while total consolidated call numbers were %8 higher than FY 2019. Meanwhile, current cruise call reservations for calendar year 2023 are 4,538, implying passenger volumes in excess of 11 million assuming pre-pandemic occupancy rates. These expected values compare favourably to the actual number of cruise calls in the last pre-pandemic year 2019, where GPH consolidated ports reached 3,346 cruise calls (Adjusted to include full year for Nassau and Antigua)

In line with increasing occupancy rates and cruise lines having returned to service with full fleet capacity, revenue and EBITDA generation displayed a robust performance, even exceeding pre-covid 2019 levels.

Revenues (excluding IFRIC-12 Construction Revenue) surged by 160% in FY 2022 compared to FY 2019, reaching TL 1.7 bn; while adjusted EBITDA jumped by 141% compared to FY 2019, reaching TL 1.0bn in FY 2022.

The power division’s revenues, operations of which include distributed power (cogeneration/ trigeneration), biomass and solar based renewable energy production, and wholesale energy services, have risen 50% yoy in FY 2022, generating 553mn TL. The division generated 184mn TL EBITDA in FY 2022, indicating a 24% increase yoy, which is mainly attributable to the increase in electricity prices and FX rates.

Registering a major milestone in its history, Consus Enerji has successfully completed its IPO process in April 2022. Trading on Borsa Istanbul for Consus shares commenced on 20th April 2022 with 30% free float, while GIH remains the largest individual shareholder with 68% stake.

The mining division realized 497,866 tons of product sales volume in 2022, down by 6% yoy, mainly due to the decrease in feldspar demand in export markets driven by the recession in Europe. The Company’s main export markets continued to be Spain, Italy and Egypt. Export related sales volume was 387,278 tons while domestic sales volume was realized at 110,588 tons for the period.

The company announced revenues of 331mn TL in FY 2022, indicating 81% increase YoY. The operating EBITDA was 106,1mn TL in FY 2022, indicating a 65% growth yoy. Diversification of customer portfolio as well as dominancy of hard currency denominated revenues were factors supporting the strong operational performance.

The real estate division registered 38,7mn TL increase in revenues and 20,5mn TL increase in EBITDA in FY 2022 yoy, with revenues and EBITDA standing at 71,4mn TL and 33,9mn TL, respectively. Operational improvement is mainly attributable to the increasing contribution from higher EBITDA generating rental operations. Rental revenues increased by 34,2mn TL with the elimination of pandemic impact, while real estate sales increased by 4.5mn TL.

The brokerage & asset management division revenues stood at 734mn TL in FY 2022, registering a 223% increase yoy, thanks to the contribution from increasing transaction volumes and full consolidation of İstanbul Asset Management, while operating EBITDA was 310.8mn TL registering a 254% increase yoy

Indebtedness:

Since 2021, we have intended to decrease our indebtedness rapidly and have made good progress towards this goal. The listing of our subsidiaries Naturelgaz and Consus Enerji, the sale of our commercial port in Antalya, and the capital increase process of GIH melted down holding stand-alone gross debt amount has decreased by half in dollar terms in the last two years. (2020 YE: $103,6mn 2021YE: $55,8mn 2022 YE: $54,8mn)

Holding consolidated net debt stood at 578.1 mn USD (TL 10.8 bn ) at the end of 2022. Meanwhile, excluding GIH, consolidated gross debt of our operational divisions stood at 697.2mn USD, of which 564.7mn USD belongs to our ports division GPH.

Consolidated Net Debt/EBITDA multiplier declined further to 3.8x at 2022 year-end from 4.3x at 30.09.2022 (2021 year-end: 11.6x). However, when Nassau’s long-term debt is excluded, Net Debt / EBITDA multiplier declines to 2.8x at 2022 year-end from 3.2x at 30.09. 2022. When entire ports business is excluded, Net Debt/EBITDA multiplier declines to 0.9x at 2022 year-end.

For further information, please contact:

GIH Investor Relations
Tel: +90 212 244 60 00
E-mail: investor@global.com.tr

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