Global Investment Holdings Announces Consolidated Net Revenues of TL351.8mn and EBITDA of TL113.6mn in the first six months of 2017

Global Investment Holdings (GIH or the Group) reports consolidated revenues of TL351.8mn for the first half of 2017, representing an increase of 25% compared to the same period last year; while announcing a consolidated EBITDA of TL113.6mn.  The proceeds of Global Ports Holding LSE offering of TL 360mn as secondary and F.A.B Partners (FAB) partnership of TL 245mn is not accounted for in the EBITDA line or P/L but under the equity. Total equity increased on a consolidated basis from TL908.3 in to TL 1,703.0 representing a 87% increase.

GIH announced its financial results for Q2 2017. According to the disclosure, consolidated net revenues reached TL351.8mn compared to TL280.5mn last year, representing an increase of 25%. 

GIH also announced that, in the first half of 2017, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) amounted to TL113.6mn, compared to an EBITDA of TL97.5mn in the same period last year.

On a divisional basis, the Group’s Port Division revenues reached TL180.9mn in the first half of 2017, representing 18% increase over the same period of 2016. A significant portion of this increase is attributable to the contributions from the Group’s commercial port operations which is unaffected by Turkish geopolitical developments and the growth was driven by strong volume growth in both container and cargo business. Although the first half of 2017 saw strong overall 14% growth in total cruise passenger numbers driven by a combination of organic growth in Valetta Cruise Port and inorganic growth from first time consolidation of small Italian ports, Cruise division financial performance impacted by ongoing weakness in consumer sentiment towards higher margin Turkish cruise ports, while we have seen a strong performance in our European portfolio of cruise ports, with revenues up at Valetta and BPI in this period.  The Port Division’s segmental EBITDA was reported as TL117.1mn in H1 2017 compared to TL101.3mn over the same period in 2016. The improvement was driven by Commercial division thanks to the increase in high-margin TEU business, increased operational efficiencies and a favorable currency environment in Turkey. The strong performance in the Commercial business has been partly offset by weakness in Turkish cruise ports (particularly Ege) due to the ongoing geopolitical tension in Turkey and the Eastern Mediterranean. Segmental EBITDA was also negatively impacted by Euro/USD fluctuations and passenger mix. All cruise ports’ revenues and Port of Adria are mainly Euro denominated and fluctuations of the average Euro/USD exchange rate compared to H1 2016 negatively impacted revenues and EBITDA reported in USD. In addition, changes in the passenger mix between turnaround and transit passengers, in favor of transit passengers, also put a cap in EBITDA expansion.

The Power/Gas/Mining Division reported revenues of TL138.0mn in the first six months of 2017, representing a 40% increase over the same period in 2016, mainly driven by the gas sales and feldspar mining operations. GIH’s Power/Gas/Mining Division EBITDA consisted of CNG, feldspar mining and energy efficiency operations. Naturelgaz revenues stood at TL76.5mn as compared to TL70.0mn over the same period in 2016, excluding pipeline gas trading. Reported sales volume of H1 2017 stood at 61.6mn m3 (excluding pipeline gas), compared to 55.8mn m3 for the same period in 2016.

GIH reported a consolidated net loss of TL137.8mn in H1 2017, compared to a net loss of TL45.1mn in H1 2016. The loss does not include TL425.0mn increase in Group’s consolidated equity due to the successful IPO of the Ports Division in London Stock Exchange, where this profit is not accounted for under the P&L, but only under the equity as per IFRS 27. The main reasons behind the loss in 1H2017 were TL78.3mn one-off expenses, resulting mainly from the write-off provision of Dağören HEPP project (TL51.0mn) and project expenses incurred from intensive M&A activity at the Port segment. Additionally, the non-cash depreciation charges, and increase in net interest expenses has also impacted the bottom line. Depreciation and amortization charges have increased from TL77.7mn in H1 2016 to TL97.5mn in H1 2017. Also, the Group has incurred TL88.3mn net interest expenses in the period. Following the successful IPO of the port business, coupled with the cash commitment from FAB, net debt position of the Group has improved significantly. Consolidated Net Debt has decreased from TL2,104.9mn in Q1 2017 to TL1,216.9mn in Q2 2017. Likewise, holding stand-alone Net Debt position of TL574.1mn turned into a “Net Cash” position of TL-5.7mn, which will significantly reduce net interest expenses in the second half of the year.

Commenting on the recent developments, GIH’s CFO, Kerem Eser, underlined the significance of the partnership with FAB and Global Ports Holding’s listing on the London Stock Exchange. “The strategic partnership with FAB, an asset management firm backed by large global investors, is expected to  further accelerate Global Investment Holdings growth in Turkey as well the rest of the world as a global investor in infrastructure and energy. Global Investment Holdings’ total equity stood at TL 1,703.0mn. ” Mr. Eser also mentioned that,  “in line with its growth strategy, GPH is now listed on the London Stock Exchange, after displaying an exemplary show of dedication and team work.  Global Ports Holding received gross proceeds of 58.0mn£ (75mnUSD), which will be used to develop and expand the cruise business further into the Caribbean and Asia. Global Investment Holdings total gross proceeds in excess of 81mn£ (105mnUSD) pursuant to the Offer, will predominantly be used to pay off debt at the Holding level.”

Commenting on recent developments Chairman Mr. Mehmet Kutman , stated that “the Group will focus on its new strategy to develop regional and global enterprises only in selected core businesses, which are clean energy and infrastructure.”

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