GIH FY 2023 Financial Results
29 April 2024
Global Investment Holdings’ Chairman & CEO, Mehmet Kutman, stated:
“I’m thrilled to announce that, despite numerous challenges, we’ve had an outstanding financial year. Global Investment Holdings has consistently demonstrated its ability to navigate through volatility with success. Our robust financial health and strong foundation are testament to our diversified portfolio, cautious management, and effective business strategies. I am pleased to report that in 2023 our performance across most business lines was well ahead of inflation as well as budget figures and that our expansion continues. Our Gas and Mining business segments have experienced a decline in performance in 2023 compared to the previous year due to market conditions beyond our control in the sectors in which they operate. To compensate, it was the best ever year for our ports business, which is set to grow strongly again in 2024.
The Chairman continued: “Our cruise port operations is now back to normal and has exceeded its budget figures by a great margin. We have delivered on our promises and reached 30 cruise ports in 17 different countries. 2023 marked a period of robust performance for Global Ports Holding, outpacing both our plans and the achievements of the previous year. Passenger movements at our ports surpassed our budget by 11% in 2023; while we expect to welcome at least 20 million passengers at our ports next year (including the new ports) which would translate into an EBITDA of over U$150m.
2024 is on its way to become a record year for the cruise industry. The publicly traded cruise companies had all reported a strong 2023 and with record forward bookings, that is, higher occupancies, at higher prices, for 2024. Cruise demand is so strong that, according to Cruise Industry News, the industry expects a robust 11% growth in 2024 YoY in passenger capacity worldwide. In a five-year horizon, worldwide fleet is expected to expand to 487 ships in 2028 from 437 ships in 2023. Likewise, worldwide passenger capacity is expected to increase to 39.0 million in 2028 from 30.6 million in 2023.”
The Chairman emphasized that “In 2023, GPH has significantly expanded its global footprint, signing concession agreements for Alicante Cruise Port in Spain (15 years) and Bremerhaven Cruise Port in Germany (10 years), and extending its presence in the Americas with a 30-year concession for St Lucia Cruise Port, which includes a 10-year extension option. Additionally, GPH secured a 19-year extension for Ege Port in Turkey until 2052 and increased its ownership in a number of ports (Barcelona, Malaga, Singapore and Lisbon) when it purchased the remaining 38% holding in Barcelona Port Investments S.L. (BPI) from the minority shareholder. Financially, GPH has strengthened its position by refinancing the Nassau Cruise Port bond, which increased in the nominal outstanding amount and reduced its interest cost, saving $2 million annually. In September, GPH raised $330 million through secured private placement notes at a 7.87% fixed coupon, earmarked for repaying debt and supporting Caribbean expansion. These notes, set to fully amortize over 17 years, have been recognized with an investment grade credit rating, highlighting GPH’s strong financial management and strategic growth.
The Chairman continued: “2023 was earmarked as a pivotal investment year for Naturelgaz, with a clear focus on augmenting capacity and reducing operational costs. The company’s investment strategy was multifaceted, involving the commissioning of new industrial CNG facilities and the aforementioned forays into solar energy. Additionally, all investment expenditures for the year fully funded through the company’s equity, thanks to its strong balance sheet. By year’s end, the company’s service reach has extended to 128 districts and towns, spanning all seven regions of the country, particularly marking substantial achievements in the city gas segment.
The Chairman added, “Consus , our energy business line performed much in line with its budget figures but the natural gas price did not increase as expected and increasing operation costs had a negative impact on our trigen/cogen business arm. As of the end of 2023, the total installed capacity of Consus Enerji’s operational power plants is 98 MW, of which 43.8 MW comes from renewables. The remaining 54.2 MW comes from distributed power plants (cogeneration and trigeneration). Consus Enerji will have increased its total installed capacity to over 110 MW when ongoing investment processes for projects will be completed.
In mining division, the global economic slowdown, particularly in our main export market, Europe, led to reduced sales volumes in 2023. Despite overall volume contraction, we anticipate sustained demand for quality/processed products, which, although smaller in volume compared to unprocessed/bulk feldspar, offer higher margins.”
İstanbul Asset Management has also had an excellent year, given the gyrations in economic policy. Assets under management have increased substantially to nearly over 68 bn TL.
Commenting on the results, the Chief Financial Officer of Global Investment Holdings, Ferdağ Ildır, stated:
“I am happy to state that 2023 was another year of success. Despite continuous expansion and heavy investment periods, as a Group, we managed to keep our financial ratios at comfortable levels. With the refinancing projects we have carried out, we have achieved an approximate annual interest savings of 10 million dollars across the group, shaping according to changing market conditions. We will continue to closely monitor market conditions.”
Global Investment Holdings reported 12.176 bn TL revenues (excluding IFRIC-12 Construction Revenue) in FY 2023, indicating a 11% decrease yoy on an inflation adjusted basis. Without inflation accounting, revenues indicate a 34% increase in FY 2023 yoy. When Gas and Mining businesses are excluded, revenues indicate a strong 98% increase.
Global Investment Holdings’ consolidated operating EBITDA is 4,690.3mn in FY 2023, remaining flat yoy on an inflation adjusted basis. Without inflation accounting, EBITDA indicates a 52% increase in FY 2023 yoy. When Gas and Mining businesses are excluded, EBITDA indicates a robust 106% increase.
GIH reported a consolidated net profit of 2,007.8mn TL in FY 2023 with a strong 76% increase on an inflation adjusted basis; while without inflation accounting, net profit marks a 41% increase. The bottom line incorporated TL 1.7bn of income and expense, of which TL 1,681.2mn were depreciation and amortization, TL 303.0mn net foreign exchange loss and 288 million TL monetary gain due to the application of IAS 29.
On a divisional basis:
On the ports side, average occupancy rates of the cruise ships visiting GPH`s consolidated ports in December 2023 was 105%. Number of calls at GPH`s ports in FY 2023 was 23% higher than FY 2022 level, while passenger movements at GPH ports in FY 2023 was 67% higher than FY 2022 level. The passenger movements in 2023 exceeded the budget by 11%
Revenues surged by 42% (pre-IAS 29: 119% increase) in 2023 compared to 2022, reaching TL 4.8bn, while adjusted EBITDA jumped by 55% (pre-IAS 29: 135% increase) compared to 2022 reaching TL 3.1bn in 2023.
Revenues decreased by 42% in FY 2023 yoy (Pre IAS 29: 16% decrease), standing at TL 4,019bn. Gross profit decreased by 57% in 2023 yoy, standing at TL 783mn according to Naturelgaz’s standalone financials. (Pre IAS 29: 28% decrease), EBITDA narrowed down by 57% in FY 2023 yoy (Pre IAS 29: 34% decrease), standing at TL 712.2mn.
Naturelgaz’s net cash surplus stood at 212.1mn TL at 31 December 2023 as opposed to 335mn TL at 31 December, 2022. In addition, Naturelgaz is planning to distribute a gross dividend payment of TL 320 mn to shareholders on May 9, 2024.
The power division reported 1,170.1mn TL revenues in 2023, indicating a 6% increase yoy (Pre IAS 29: 68% increase). EBITDA decreased by a 16% to 290.9mn TL in 2023 yoy (Pre IAS 29: 17% increase). The decrease in EBITDA was mainly due to high TL inflation which caused operating margins to shrink for business lines with hard currency earnings and the narrowing margin between electricity prices and natural gas prices in the Distributed Power segment, as well.
The mining division because of the decline in demand from the local and European markets, achieved a sales volume of 318,531 tons in 2023, representing a 36% decrease yoy. The Company’s main export markets continued to be Spain, Italy and Egypt. Export related sales volume was 233,203 tons while domestic sales volume was realized at 85,329 tons for the period.
The mining division announced revenues of 465.1 mn TL in 2023 with 29% decrease (Pre IAS 29: 10% increase). The operating EBITDA was 117.8 mn TL in 2023, indicating a 43% decline yoy (Pre IAS 29: 8% decrease). The decline in EBITDA was mainly attributable to lower sales volume as well as contracting operating margins as a result of higher inflation rates compared to FX rate hikes.
The real estate division registered 20% increase in revenues (Pre IAS 29: 82% increase) and 21% increase in EBITDA (Pre IAS 29: 78% increase) in 2023 yoy, with revenues and EBITDA standing at 163.9mn TL and 80.4mn TL, respectively. Operational improvement is mainly attributable to the increasing contribution from higher EBITDA generating rental operations
The brokerage & asset management division revenues stood at 1,442.8mn TL 2023, registering a 9% increase yoy (Pre IAS 29: 64% increase), thanks to the contribution from increasing transaction volumes, while operating EBITDA was 498.1mn TL registering a 5% decrease (Pre IAS 29: 57% increase) yoy.
Indebtedness:
Gross Debt/EBITDA fell below 5.0x and stood at 4.9x.
Holding consolidated net debt stood at 662.4mn USD (TL 19.5 bn) at 2023 year-end. Meanwhile, excluding GIH standalone, consolidated gross debt of our operational divisions stood at 835,5mn USD. (Ports division: 687,4mn USD).
For further information, please contact:
GIH Investor Relations
Tel: +90 212 244 60 00
E-mail: investor@global.com.tr
