A good start to the year, leaving the clouds behind…

Global Investment Holdings (“GIH”), a diversified conglomerate operating in 13 different countries across 4 continents, announced its first quarter consolidated results which ended 31 March 2022, and commented on recent developments.

Full year figures for Global Investment Holdings reported Consolidated Net Revenues (excluding IFRIC 12 Construction Revenue) of TL 901.8m for the first quarter of 2022 with a 194% increase over the same period in 2021. Consolidated Operating EBITDA rose 283% to TL 176.4m in the same period.

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

“After two years of disruption by the pandemic, I am happy to see that the effects of the pandemic are now finally fading away and that we have made a good start to 2022 with a large-scale recovery underway. Almost all our business lines demonstrated superior performances in the first quarter of 2022, underlining the ongoing return to normalisation.

Thankfully today, the global cruise industry is operating almost normally and the restart of the cruise business continues to dramatically progress thanks to the stringent protocols and strong pent-up demand. Over the past two months, global cruise demand has materially surpassed both pre-Omicron and 2019 levels. As of now, major cruise lines have returned to service with 95% of fleet capacity and are expecting 100% fleet deployment by Summer 2022, in time for the peak summer season. Omicron moderated load factors in January and February; yet load factors improved for the rest of the quarter, standing at 65-70% by the end of March 2022. Again, major cruise lines expect load factors to improve, averaging between 75-80% in the second quarter, and reach triple digits by the end of the year. At GPH ports, the number of calls in March 2022 was 14% higher than March 2019 (pre-pandemic) levels, while the number of passengers visiting GPH ports in March 2022 reached 62% of March 2019 levels (This ratio was 35% in January 2022 and 47% in February 2022). The indicators for GPH’s Caribbean ports, Nassau and Antigua (high season) show that March 2022 numbers have reached and even exceeded March 2019 numbers.”

The Chairman added, “We have continued our strategic expansion in the ports. We have added Tarragona Cruise Port in Spain and Crotone Cruise Port in Italy to our network, further strengthening our presence in the Mediterranean. Tarragona is a 12-year concession, with a 6-year extension option; while Crotone is a 4-year renewable concession.”

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. I would like to welcome our new shareholders who share our vision. I would like to extend my sincere gratitude to all my colleagues who worked very hard to make this successful transaction happen. We look forward with confidence to the next stage of our development as a listed company. I would also like to add that Consus’s IPO was one of the crucial and momentous steps according to the Group Strategy that was set out back in 2020. Accordingly, our ultimate goals are listing 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.”

The Chairman added: “With respect to the current tragic war situation in Ukraine, we extend our sympathies and condolences to the country and its people who continue to be affected. We are hoping for a quick resolution.”

Commenting on the results, the Chief Financial Officer of Global Investment Holdings, Ferdağ Ildır, stated: “Our Group has been taking solid effective steps to stabilise its liquidity position and manage its long and short-term debt obligations. Our company continues to aim to reduce its effective debt burden, a process we started in 2021. The listing of NaturelGaz, the sale of our commercial port in Antalya, the capital increase process of GIH melted down holding stand-alone debt by nearly half in 2021. The listing of Consus Enerji should also help reduce the relative debt levels in the following quarters. As a Group, we have received gross proceeds of TL519.8mn from the offering; of which TL 283.5mn is at Global Investment Holdings level and TL 263.3mn is at Consus Enerji level. At the Holding level, proceeds will predominantly be used to pay off debt at. At Consus Enerji level, proceeds will be used for new investments, working capital requirements and debt reduction.”

Global Investment Holdings reported 901.8mn TL revenues (excluding IFRIC-12 Construction Revenue) in Q1 2022, indicating a robust 194% increase yoy with strong contribution from all business divisions, with the gas division contributing the most. The sequential trend in Q1 2022 compared to Q1 2021 confirms that the improvement in performance has gained further momentum in Q1 2022, in line with the diminishing impact of Covid 19 and strengthening activity in underlying businesses.

Global Investment Holdings’ consolidated operating EBITDA soared by 283% in Q1 2022 yoy and reached 176.4mn TL, driven by a solid contribution from the gas, power, mining, real estate divisions, with the ports division contributing the most to the increase. Strong EBITDA generation continued in Q1 2022 in line with the diminishing impact of Covid 19 and strengthening activity in underlying businesses.

GIH reported a consolidated net profit of 76.8m TL in Q1 2022, compared to a net loss of TL 184.7m in Q1 2021. The bottom line incorporated TL 166.4m of non-cash charges of which TL 172.4m were depreciation and amortization, and TL 6.0m in net foreign exchange gain. Meanwhile, TL 105.1m one-off income/(expenses) included project expenses and IFRS related adjustments such as non-cash valuation gain from investment properties

Depreciation and amortization charges, increased from TL 89,3.2m in Q1 2021 to TL 172.4m in Q1 2022. If the FX rate had remained the same as 2021 average, depreciation and amortization expense would have been TL 81.1m lower. Also, the Group has incurred TL 6,0m in net non-cash foreign exchange gain, compared to TL 114.7m foreign exchange loss in Q1 2021.

The Group’s net interest expenses decreased from TL 78.4m TL in Q1 2021 to TL 44.6m in Q1 2022 thanks to the decrease in consolidated net debt. If the average FX rate had maintained its 1Q 2021 level, net interest expense would have been TL 22.3m lower than the reported figure in Q1 2022.

On a divisional basis:
Naturelgaz maintained its solid financial position in Q1 2022 thanks to its operational capability and increased operations in the Citygas business line. Sales volume reached 67.9mn Sm3 in Q1 2022, representing an increase of 41% yoy. Citygas sales, whose share in the total sales volume increased gradually in 2021, continued its rapid growth in the first quarter of the year as well. Citygas sales volume increased by 84% yoy, reaching 35.1mn Sm3. Naturelgaz improved its net cash position to 58.1mn TL as of 31.03.2022. In addition, the Shareholders’ Meeting held on April 28, 2022 agreed to distribute a gross dividend payment of TL 35.8 mn.

Revenues increased by 267% yoy in Q1 2022, reaching TL 458.0 mn, reflecting the increase in sales volume especially in Citygas, Bulk CNG, but of course also the increase in gas prices. Gross profit reached TL 80,5 mn based on company standalone financials in Q1 2022. Thus, the Company realized approximately 60% of the gross profit of 2021, in the first quarter of 2022. EBITDA increased by 189% yoy in Q1 2022, reaching TL 63.9mn. Profit before tax, which was TL 0.3mn in Q1 2021, increased to TL 41.8mn in the first quarter of 2022.

On the ports side, the outlook for the cruise industry continues to improve with accelerated recovery. Major cruise lines have returned to service with 95% of fleet capacity; while expecting 100% fleet deployment by Summer 2022, in time for the peak summer season in the Mediterranean. Omicron moderated load factors in January and February; yet load factors improved to 65-70% by the end Q1 2022. Major cruise lines expect load factors to improve and average between 75-80% in Q2 2022, and reach triple digits by the end of 2022. Number of calls at GPH ports in March 2022 was 14% higher than March 2019 (pre-pandemic) levels; while number of passengers visiting GPH ports in March 2022 reached 62% of March 2019 levels (Jan 22: 35%, Feb 22: 47%). The indicators for GPH’s Caribbean ports, Nassau and Antigua (high season) show that March 2022 numbers have reached and even exceeded March 2019 numbers. Number of calls in Nassau in March 2022 was 20% higher than March 2019 levels, while number of passengers reached 72% of March 2019 levels. Similarly, number of calls in Antigua in March 2022 was 19% above March 2019 levels, and number of passengers reached 56% of March 2019 levels. On a cumulative basis during January-March 2022; total consolidated number of calls totally caught up with March 2019 numbers, while total consolidated number of passengers reached 48% of March 2019 levels. Numerically, passenger volumes of 867k in Q1 2022 were up from the 10k in Q1 2021, while number of calls increased from 12 in Q1 2021 to 632 in Q1 2022.

Revenue and positive EBITDA generation gained further momentum in Q1 2022 in line with the diminishing impact of Covid. The ports division reported 170.5mn TL revenues (excluding IFRIC-12 Construction Revenue) in Q1 2022, up 489% yoy. When cruise-only revenue is considered, the improvement becomes more striking in Q1 2022 with nearly 9-fold increase yoy. Meanwhile, operating consolidated adjusted EBITDA marked a positive 51.2mn TL in Q1 2022 as opposed to -20.1mn TL in Q1 2021.

The power division reported 126.1mn TL revenues in Q1 2022, a 65% increase yoy. Meanwhile, the division generated 37.7mn TL EBITDA in Q1 2022, indicating a 46% 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 70% stake.

The mining division realized 124,187 tons of product sales volume in the first quarter of 2022, up by 25% yoy, mainly due to strong feldspar demand from export markets. The Company’s main export markets continued to be Spain, Italy and Egypt. Export related sales volume reached 104,549 tons while domestic sales volume was realized at 19,638 tons for the period. The mining division announced revenues of 68.6mn TL in the first quarter of 2022, indicating 136% increase YoY. The operating EBITDA was 22.6mn TL in Q1 2022, indicating a robust 101% growth yoy and delivering a 32.9% operating EBITDA margin. Volume growth mainly driven by the strengthening demand in the export markets as well as dominancy of hard currency denominated revenues were factors supporting the improvement in profitability during the period.

The real estate division registered 9.3m TL increase in revenues and 6.0m TL increase in EBITDA in Q1 2022 yoy, with revenues and EBITDA standing at 14.6m TL and 6.4m TL, respectively. Operational improvement is mainly attributable to the increasing contribution from higher EBITDA generating rental operations. Rental revenues increased by 7.3m TL with the end of the pandemic impact, while real estate sales increased by 2.0m TL.

The brokerage & asset management division’s revenues stood at 63.1mn TL in Q1 2022, registering a 50% increase yoy; while operating EBITDA was 18.1m TL as opposed to 21.3mn TL in Q1 2021. The decrease in EBITDA was mainly attributable to the decrease in brokerage trading volumes

Indebtedness:

Holding consolidated net debt decreased from 556.6 m USD at the end of 2021 to 544.8 m USD at the end of Q1 2022.

For 2021, we had intended to decrease our indebtedness rapidly and have made good progress towards this goal. We continue to focus on deleveraging in 2021. The Group has received gross proceeds of TL519.8mn from the initial public offering of Consus Enerji in April 2022; of which TL 283.5mn is at Global Investment Holdings level. Global Investment Holdings will use such proceeds to pay off debt at the holding level, which should help improve debt levels in the coming periods.

Major operational developments and corporate activity

On the operational front, developments are on track, in line with the growth strategy by means of new acquisitions and investments mainly into core businesses, namely ports infrastructure, renewable energy and asset management.

Global Ports Holding continuously monitors potential public and private acquisitions around the world. This led, for example, to, Tarragona Port Authority (“Port Authority”) awarding Global Ports Holding a 12-year concession, with a 6-year extension option, to manage the services for cruise passengers in Tarragona, Spain. In Q3 2021, a €30m investment into the port infrastructure in Tarragona Port was completed. This investment programme included a new cruise pier in the “moll de balears” which can now handle the world’s largest cruise ships, while berth capacity has been doubled to four ships at any one time. In addition, as well as expanding the general area available for cruise operations, the Port Authority has invested in the provision of shore power, which will significantly reduce the Co2 emissions from cruise ships while they are in port. Under the terms of the agreement, GPH will invest up to €5.5m into building a new state of the art modular cruise terminal, which will utilise solar power to ensure the sustainable provision of the terminal’s energy needs. The new terminal will provide cruise passengers with an improved port experience, including retail and F&B opportunities, while new coach and car parking facilities will significantly improve the ports transport infrastructure. The innovative modular design of the terminal will provide maximum flexibility to adapt the terminal to meet future capacity needs and to provide a vibrant and exciting event space in Tarragona. In 2019, prior to the increase in berth capacity, Tarragona cruise port welcomed c130k cruise passengers. Tarragona is situated less than an hour’s drive from Barcelona airport and the recently completed investment into the port infrastructure and the planned new terminal will significantly improve the port’s attractiveness for turnaround operations in the region. In addition, a Concession Agreement has been signed with the Port Authority System of the South Tyrrhenian and Ionian seas (ports of Gioia Tauro, Corigliano, Crotone, Palmi and Vibo Valentia) for a 4-year renewable concession to manage the services for cruise passengers in the Port of Crotone, Italy. GPH will invest in improving systems, equipment and technology to improve the operational performance of the cruise port and to ensure environmental protections and safety and security programs.

Global Investment Holdings’ power generation subsidiary, Consus Enerji operating in renewables and distributed power had applied to the Capital Markets Board of Turkey for the purpose of initial public offering (IPO). Consus Enerji has successfully completed the IPO process in April 2022. The IPO, priced at 4.50 TL per share and executed with fixed price-equal allocation and direct sale from the stock exchange, has received a pleasing interest with 550.9 million TL demand from 173,974 retail investors. Accordingly, 115,500,000 shares subject to the offering, including the over-allotment option have been entirely subscribed, marking a 30% free float for the company. Based on the offer price, the total market capitalisation of Consus Enerji at the commencement of trading was approximately 1.8 billion TL. Trading on Borsa Istanbul for Consus shares commenced on 20th April 2022, with the ticker “CONSE.IS”. Meanwhile, half of the offering size has been reserved for price stability, while such transactions could be implemented for one month, starting from the commencement of trading. The offering comprised from issuance of new ordinary shares and sale of existing shares. The Company issued 52,500,000 new shares, increasing the total number of shares from 333,000,000 to 385,500,000. In addition, GIH sold 52,500,000 existing shares and also an additional 10,500,000 shares were made available pursuant to an over-allotment option, leaving GIH with net offered shares of 63,000,000. After the IPO, GIH remains the largest individual shareholder of Consus Enerji with 70% stake. 

At the Holding level, the authorized capital ceiling permit given by the Capital Markets Board was valid for five years, expiring by the end of 2022. GIH’s Board of Directors resolved on 24th March 2022 to make the necessary amendments to the Articles of Association to extend the ceiling for another five years and to increase the ceiling to TL 9 billion; and hence, to apply to the Capital Markets Board and the Ministry of Trade to obtain the necessary approvals. Once the regulatory approvals are obtained, amendments to the Articles of Association will be presented to the first Annual General Assembly’s approval.

For further information, please contact:
GIH Investor Relations
Tel: +90 212 244 60 00
E-mail: investor@global.com.tr

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