Impressive set of results with strong contribution from all business lines…

Global Investment Holdings (“GIH”), a diversified conglomerate operating in 13 different countries across 4 continents, announced its first half consolidated results which ended 30 June 2022, and commented on recent developments.
Full year figures for Global Investment Holdings reported Consolidated Net Revenues (excluding IFRIC 12 Construction Revenue) of TL 2,410.7m for the first half of 2022 with 285% increase over the same period in 2021. Consolidated Operating EBITDA rose 565% to TL 714.2m in the same period.
Global Investment Holdings’ Chairman & CEO, Mehmet Kutman, stated:

“We had made a good start to the year with promising Q1 numbers; and, I am now having the pleasure to have seen that a large-scale recovery from the pandemic was well underway in the second quarter of 2022, even with a stronger pace. All our business lines demonstrated superior performances in the second quarter of 2022, underlining the ongoing return to normalisation.

The restart of the cruise business continues to dramatically progress thanks to the widespread easing of travel restrictions and strong pent-up demand. The easing of restrictions coincided with the start of the main Caribbean cruise season, paving the way for GPH ports in the Caribbean to experience a significant and sustained recovery in volumes. Cruise lines returned their entire fleets back into operation in June 2022, in time for the peak summer season. Occupancy rates for the cruise ships continued to improve, averaging between 80-85% by the end of Q2 2022. The cruise industry currently expects occupancy rates to continue to improve and average around 90% in Q3 2022 and reach triple digits (pre-pandemic levels) by the end of the year. At GPH ports, number of calls in June 2022 was 19% higher than June 2019 (prepandemic) levels, while number of passengers reached %80 of March 2019 levels.”

The Chairman added, “We have continued our strategic expansion in the ports despite the continuing challenges of the pandemic. We had added Tarragona Cruise Port in Spain and Crotone Cruise Port in Italy to our network in Q1 2022. Adding on, we have recently 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). The concession for Las Palmas, the largest port among the three, is for 40 years and the concessions for the two other ports are 20 years. Furthermore, this week we have signed a 30-year concession agreement with the Puerto Rico Ports Authority for San Cruise Port, Puerto Rico, marking a significant development in our strategic ambitions in the Caribbean. San Juan Cruise Port, which handled 1.8m unique passengers in 2019 (including c. 0.4m homeport passengers, i.e. 2.2m passenger movements), will become the third-largest cruise port in GPH’s global network. The addition of this fantastic location to our cruise port network marks a further important step in our growth strategy and will grow cruise passenger volumes across our network to over 16 million passengers per annum; while increasing our global cruise market share to 10%. The growth we have delivered is not just about adding new ports. We now have a more balanced network of cruise ports in terms of regional exposure and seasonality. In 2017, the majority of the cruise activity was centred in the Med, with 88% of the passenger volume; whereas now, Mediterranean represents 50% of the passenger volume at our consolidated and managed ports.”

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. 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.”

Commenting on the results, the Chief Financial Officer of Global Investment Holdings, Ferdağ Ildır, stated:
“Our Group has been taking solid effective steps to reduce its effective debt burden, a process we started in 2021. 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 by 46% in US$ terms in 2021, while marking a further 9% decline in 2022 first half. Meanwhile, EBITDA generation was remarkably boosted in Q2 2022 (Apr-Jun) thanks to the drastically lessening impact of Covid 19 and bolstering activity in all of our business lines. Accordingly, our Net Debt / EBITDA was positively impacted. Looking ahead, we maintain our positive stance along the year and beyond. According to our forecasts, for FY 2022, we expect to triple our consolidated revenues and quadruple consolidated EBITDA yoy.”

Global Investment Holdings reported 2.4 bn TL revenues (excluding IFRIC-12 Construction Revenue) in 6M 2022, indicating a robust 285% increase yoy with strong contribution from all business divisions, with the gas division contributing the most. The improvement in revenue generation has gained stronger momentum in Q2 2022 (Apr-Jun), in line with the radically diminishing impact of Covid 19 and strengthening activity in underlying businesses, marking a 5 times increase over Q2 2021.

Global Investment Holdings’ consolidated operating EBITDA soared by 565% in 6M 2022 yoy and reached 714.2mn TL, driven by a solid contribution from all business divisions, with the Ports and Gas division contributing the most. Strong EBITDA generation gained further momentum in Q2 2022 (Apr-Jun) in line with the radically diminishing impact of Covid 19 and strengthening activity in underlying businesses, displaying a 9 times increase over Q2 2021.

GIH reported a consolidated net profit of 81.3m TL in 6A 2022, compared to a net loss of TL 417.7m in 6A 2021. The bottom line incorporated TL 406.2 of non-cash charges of which TL 339.4m were depreciation and amortization, and TL 66.8m in net foreign exchange loss. Meanwhile, TL 112.5m one-off income included project expenses and IFRS related adjustments such as non-cash valuation gain from investment properties.

Depreciation and amortization charges, increased from TL 173,2.2m in 6A 2021 to TL 339.4m in 6M 2022. If the FX rate had remained the same as 6A 2021 average, depreciation and amortization expense would have been TL 153.4m lower.

The Group’s net interest expenses increased from TL 155.2m TL in 6M 2021 to TL 171.2m in 6M 2022. If average FX rate had maintained its 6M 2021 level, net interest expense would have been TL 82.9m lower than the reported figure in 6M 2022.

On a divisional basis:

Naturelgaz maintained its solid financial position and recorded significant growth in 6M 2022. Sales volume reached 115.8mn Sm3 in 6M 2022, representing an increase of 30% yoy. Citygas sales, whose share in the total sales volume increased gradually in 2021 and 6A 2022, continued its rapid growth in the second quarter of the year as well. Citygas sales volume increased by 74% yoy, reaching 41.8mn Sm3. Revenues increased by 432% yoy in 6M 2022, reaching TL 1,235 mn, reflecting the increase in sales volume especially in Citygas, Bulk CNG and the increase in gas prices. Gross profit reached TL303.3 mn in 6M 2022, representing an increase of 422% yoy, based on company standalone financials. EBITDA increased by 618% yoy in 6M 2022, reaching TL 260.7mn. The decrease in seasonality thanks to the increase in Citygas sales volume, effective cost management, and improvement in gas margin contributed significantly to the EBITDA growth.

Profit before tax, which was TL 6.1mn in Q2 2021, increased to TL 223.7mn in the second quarter of 2022, based on company standalone financials. As of June 30, 2022, Naturelgaz’s net debt amount was TL 2.4m. In addition, Naturelgaz distributed a gross dividend payment of TL 35.8 mn to shareholders on May 9, 2022.

• On the ports side, major cruise lines have returned to service with full fleet capacity in June 2022, while port operations kept gaining acceleration at high speed. Occupancy rates improved to average between 80-85% by the end of Q2 2022. Major cruise lines expect occupancy rates to improve and average around 90% in Q3 2022 and reach triple digits (pre-pandemic levels) by the end of the year. Occupancy rates of the cruise ships visiting GPH ports in the Caribbeans in June 2022 surpassed 100%, while averaging around 65% at GPH’s Mediterranean ports. Number of calls at GPH ports in July 2022 standalone was 10% higher than July 2019 (prepandemic) levels, while number of passengers visiting GPH ports in July 2022 standalone reached %99 of July 2019 levels. The improvement was mainly driven by the strong passenger increase at Ege Port Kuşadası. Total consolidated number of passengers reached 68% of January-July 2019 levels during January-July 2022; while total consolidated number of calls were %8 higher than January-July 2019 levels.

Revenue and positive EBITDA generation gained further momentum in Q2 2022 in line with the diminishing impact of travelling restrictions, cruise lines returning to service with full fleet capacity and increasing occupancy rates. Accordingly, revenues surged by 755% yoy, reaching 587.1mn TL (excluding IFRIC-12 Construction Revenue) in 6M 2022, while consolidated adj. EBITDA marked a positive 299 mn TL in 6M 2022 as opposed to -22.8mn TL in 6A 2021.

The power division’s s revenues, which include distributed energy facilities (cogeneration/trigeneration), biomass and solar based renewable energy production rose 59% yoy in 6M 2022, generating 263mn TL, mainly driven by the increase in electricity prices and FX rates. The division generated 84.6mn TL EBITDA in the first half of 2022, indicating a 31% 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 270,584 tons of product sales volume in the second quarter of 2022, up by 14% 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 214,926 tons while domestic sales volume was realized at 55,658 tons for the period.

The mining division announced revenues of 156.3mn TL in the first half of 2022, indicating 115% increase yoy. The operating EBITDA was 53.1mn TL in 6A 2022, indicating a robust 91% growth yoy. Volume growth 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 19.9m TL increase in revenues and 9.7m TL increase in EBITDA in 6M 2022 yoy, with revenues and EBITDA standing at 31.7m TL and 12.1m TL, respectively. Operational improvement is mainly attributable to the increasing contribution from higher EBITDA generating rental operations. Rental revenues increased by 15.3m TL with the drastically declining pandemic impact, while real estate sales inreased by 4.5m TL.

The brokerage & asset management division’s revenues reached 136.2mn TL in 6M 2022, a 85% increase yoy, thanks to the contribution from increasing in transaction volumes and full consolidation of İstanbul Asset Management. Meanwhile, operating EBITDA stood at 39.5mn TL in 6M 2022 (31.6mn TL in 6M 2021).

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 by 46% in US$ terms in 2021, while marking a further 9% decline in 2022 first half. (Gross debt decreased from USD 55.8 mn at the end of 2021 to USD 50.9mn at 30.06.2022.)

Holding consolidated net debt decreased from 556.6 mn USD (TL 7.223 mn ) at the end of 2021 to 550.9mn USD (TL 9.182 mn ) at 30.06.2022. Meanwhile, excluding GIH, consolidated gross debt of our operational divisions stood at 627.4mn USD, of which 549.6mn USD belongs to our ports division GPH.

Consolidated Net Debt/EBITDA multiplier declined to 6.7x at 30.06.2022 from 11.6x at the end of 2021. However, when Nassau’s long-term debt is excluded, Net Debt / EBITDA multiplier declines to 5.1x at 30.06. 2022. When entire ports business is excluded, Net Debt/EBITDA multiplier declines further to 1.5x at 30.06.2022.

For further information, please contact:

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

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