Global Investment Holdings announces Consolidated Net Revenues of 1,083.7mn TL and an Operating EBITDA of 425.8mn TL in the first nine months of 2018, which indicates a robust 32% and 22% growth compared to 9M 2018, respectively. Quarterly results were also solid with the bottomline marking 13.5mn TL net profit in Q3 2019 as opposed to a net loss of 35.2mn TL in Q3 2018.

Global Investment Holdings (“GIH“ or the “Group”) reports consolidated revenues of 1,083,7mn TL for the first nine months of 2019, representing a notable growth of 32% compared to the same period last year; while announcing a consolidated operating EBITDA of 425.8mn TL, marking a strong 22% yoy growth.

Global Investment Holdings’ Chairman & CEO, Mehmet Kutman, stated that “I can proudly say that, as Global Investment Holdings, our operations are right on track in line with our strategy. On the ports side, we have added Nassau and Antigua cruise ports in our portfolio, recording a truly historic moment. Our successful expansion into the Caribbean marks a step-change in our operations. With the continued growth in cruise tourism globally, our ambitions do not end there; we continue to selectively assess the opportunities in the industry. Another pleasing development comes from the power side; we have added our first solar power plant in our renewable portfolio, increasing total installed capacity to 92.3MW, of which 38.2MW is from renewable sources. Asset Management business has also been very successful in 2019, which displayed outstanding fund performances. Our pension fund, which also takes place in GIH Pension Contribution Scheme, has registered the highest return among 408 pension funds in the market with 37.0% return YTD, contributing also to our employees.”

Commenting on the results, CFO Mehmet Kerem Eser stated that “Our operational and financial position remained strong in the period despite the general uncertainty around global trade. Our unmatched diversified portfolio under integrated business model enabled us to deliver solid operational result. We’ll focus more on integrating new acquisitions and investments with our existing operations, streamlining operational efficiencies, improving profitability, and liquidity.”

GIH announced its financial results for 9M 2019. Consolidated net revenues reached 1,083.7mn TL compared to 820.6mn TL last year, representing a sturdy increase of 32% yoy. Nearly all business divisions under the Company contributed to this increase, with Gas division contributing the most.

In the first nine months of 2019, Operational Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) amounted to 425.8mn TL, compared to an EBITDA of 349.4mn TL in the same period last year, which represents a pleasing 22% growth yoy. Gas division was the major contributor to the EBITDA increase.

Group’s Gas division, as the best performer in 2019 among all business segments, distributed 127.8mn m3 sales volume in 9M 2019, compared to 110.5mn m3 for the same period of 2018 (excluding 6.8mn m3 pipeline gas sales). Volume increase was a result of the strategy to increase winter sales and all year constant customer sales in order to eliminate summer peaks. Revenues nearly doubled yoy, reaching 325.2mn TL; mainly attributable to the increase in sales volume and better pricing as pass through Botaş tariff in natural gas increased by 14.7% yoy as of 31 August 2019 (9M 2018 including pipeline gas sales of 5.6mn TL for gas balancing). Meanwhile, Gas division’s operating EBITDA reached 82.3mn TL in the period, nearly tripling yoy and translating into c.9pp EBITDA margin expansion. Improved efficiency in cost management as well as strong revenue growth supported Naturelgaz’s outstanding profitability improvement in the period.

The Ports division’s revenues were 515.2mn TL at the end of nine months of 2019, up by 19% yoy, while operating consolidated EBITDA increased by 14% yoy, reaching 343.6mn TL.

Power division, which includes co/tri-generation and biomass based renewable power production, reported 97.8mn TL revenues in 9M 2019, up by a solid 65% over the same period last year. The increase was mainly attributable to the commencement of 12MW Mardin biomass power plant, selling electricity at the feed-in tariff rate of 13.3 dollar-cent/kWh and pleasing performance of co/tri-gen business. On the EBITDA front, Power business generated 2.1mn TL EBITDA in the period, compared to 4.8mn TL in 9M 2018. The decline is attributable to c.4mn TL non-recurring cost effect related to biomass fuel storage during the set up phase. When such effect is excluded, both co/tri-generation and biomass businesses indicate an increased EBITDA.

Mining division realized 370,893 tons of product sales in the first nine months of 2019, almost unchanged from a year ago. The Mining division’s revenues came out at 72.7mn TL, implying a robust 33% yoy increase, while operating EBITDA up by 16% yoy, reaching 15.9mn TL. Sustainable export profitability has been achieved thanks to the improvement in production performance and quality.
The Real Estate division reported revenues of 32.1mn TL and an operating EBITDA of 15.7mn TL in 9M 2019, compared to 45.8mn TL and 20.1mn TL, respectively in 9M 2018. Higher revenue recognition in Skycity office project upon completion had boosted the numbers in 9M 2018.

The Brokerage & Asset Management division reported revenues of 37.2mn TL in 9M 2019, indicating a mere 2% yoy increase, and an operating EBITDA of 1.1mn TL, compared to 2.1mn TL same period last year. The Group’s 80% subsidiary Actus Asset Management’s mutual fund ranks #1 among all mutual funds in the market with 62.9% return YTD in 2019, compared to BIST 100’s 13.2% return YTD. Meanwhile, Actus’ pension fund (Vakıf Emeklilik ve Hayat Değişken Grup Emekllik Fonu), has had the highest return among 408 pension funds in the market, with 37.0% return YTD, compared to 17.6% YTD return of its benchmark.

GIH reported a consolidated net loss of 86.3mn TL in 9M 2019, compared to a net loss of 86.2mn TL in 9M 2018; while on quarterly basis, the bottomline turned to positive territory, reporting 13.5mn TL net profit in Q3 2019 (35.2mn TL net loss in Q3 2018). Despite higher revenue recognition along with EBITDA maximization, net loss stemmed from non-cash depreciation and foreign currency translation differences incurred on Group’s long term borrowings. Depreciation and amortization charges have increased from 207.9mn TL in 9M 2018 to 269.7mn TL in 9M 2019, purely as a result of foreign currency valuations, as well as 14.8mn TL additional charge in 9M 2019 due to first time application of IFRS 16. Also, the Group has incurred 44.0mn TL net non-cash foreign exchange losses, compared to 106.0mn TL in the same period last year. Net interest expenses in the period were 163.2mn TL, compared to last year’s 135.2mn TL, increase is solely attributable to the weakness in TL against hard currencies.

On the operational front, developments are on track in line with the strategy of growth by means of new acquisitions and investments mainly into core businesses, which are ports infrastructure, clean energy and asset management. On the ports side, during the period, significant progress was made in port acquisitions such as, commencement of the cruise port operations in Nassau (the Bahamas) and Antigua (Antigua & Barbuda). The commencement of these agreements is a significant milestone for the Group and expected to increase the total passenger volumes for 2020 to close to 13 million. On the clean energy side, the Group added its first solar power plant to its renewable portfolio. GIH partially commissioned its first solar power plant, Ra Solar, with 9MW (10.8 MWp) installed capacity in Mardin, increasing total generation capacity to 92.3 MW, of which 38.2 MW is from renewable sources. Ra Solar will be subject to Renewable Energy Resources Support Mechanism (YEKDEM) starting from 2020, selling electricity at 13.3 dollar-cent/kWh for ten years. Ra Solar is expected to meet the electricity requirements of more than 7.5 thousand households.

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