REG-Global Ports Holding PLC Trading statement for the twelve months ended 31 March 2023

Global Ports HoldingAnnouncement

15/05/2023 07:15

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   Global Ports Holding PLC (GPH)
   Trading statement for the twelve months ended 31 March 2023

   15-May-2023 / 07:00 GMT/BST

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   Global Ports Holding Plc

   Trading statement for the twelve months ended 31 March 2023

   Global  Ports  Holding  Plc  (“GPH”  or  “Group”),  the  world’s   largest
   independent cruise port operator,  today issues a  trading update for  the
   period from 1 April 2022 to 31 March 2023.

                               12 months 12 months    YoY  3 months  3 months
   Key Financials & KPIs1          ended     ended change     ended     ended
                               31-Mar-23 31-Mar-22  (%)   31-Mar-23 31-Mar-22
                                                                         
   Passengers (m)2                   9.2       2.4   281%       2.4       0.9
   Total Revenue ($m)              213.4     128.4    66%      39.5      21.2
   Adjusted Revenue ($m)3          117.2      40.3   191%      25.0      12.1
   Segmental EBITDA ($m)4           80.0      12.9   519%      16.1       4.9
   Adjusted EBITDA ($m)5            72.7       7.0   937%      13.5       2.6
   Segmental EBITDA Margin (%)     68.3%     32.1%            64.5%     40.1%
   Adjusted EBITDA Margin (%)      62.0%     17.4%            54.2%     21.8%
                                                                             
                               31-Mar-23 31-Mar-22                           
   Gross Debt (IFRS) ($m)          676.0     598.6    13%                    
   Gross Debt ex IFRS 16           615.9     534.7    15%                    
   Leases ($m)
   Net Debt ex IFRS 16 Leases      497.5     435.0    14%                    
   ($m)
   Cash and Cash Equivalents       118.4      99.7    19%                    
   ($m)

    

   Notes                          

    1. All $ refers to United States Dollar unless otherwise stated
    2. Passenger  numbers  refer  to   consolidated  and  managed   portfolio
       consolidation perimeter; hence it  excludes equity accounted ports  La
       Goulette, Lisbon, Singapore, Venice and Vigo.
    3. Adjusted revenue  is calculated  as total  revenue excluding  IFRIC-12
       construction revenue
    4. Segmental EBITDA includes the EBITDA from all equity consolidated
       ports and the pro-rata Net Profit of equity-accounted associates La
       Goulette, Lisbon, Singapore, Venice and Vigo and the contribution from
       management agreements
    5. Adjusted EBITDA calculated as Segmental EBITDA less unallocated
       (holding company) expenses

   Key Highlights

     • GPH welcomed 9.2 million passengers across the consolidated port
       network in the Reporting Period, a 281% increase on the prior
       Reporting Period
     • Adjusted Revenue for the Reporting Period was USD 117.2 million, a
       191% increase on the USD 40.3 million in the prior Reporting Period
     • Adjusted EBITDA rose 937% to USD 72.7 million, reflecting the positive
       impact of the significantly higher passenger volumes and Adjusted
       Revenue and the continued tight control of OPEX, which rose by just
       34%.

          • In the fourth quarter we added Alicante Cruise Port to our
            network, signing a 15-year concession agreement. This took the
            total number of new ports added in the Reporting Period to seven.
          • Based on current call lists across our current consolidated and
            managed cruise port network we currently forecast to welcome 11.8
            million passengers in the upcoming 2024 Reporting Period.
            Passenger volumes are set to increase further as we expect to add
            San Juan Cruise Port and St Lucia Cruise Port to the GPH network
            in the 2024 Reporting Period
          • Shortly after the end of the Reporting Period:

               ◦ Nassau Cruise Port successfully refinanced part of its
                 indebtedness, reducing the cost of debt as a result, and
               ◦ Ege Port entered into an extension agreement, extending the
                 current concession by additional 19 years.

   Balance Sheet

   At 31 March 2023 IFRS Gross Debt was USD 676.0 million (Ex IFRS-16  Leases
   Gross Debt: USD 615.9 million), compared to Gross Debt at 31 March 2022 of
   USD 598.6 million (Ex IFRS-16 Leases Gross Debt: USD 534.7 million).

   The main drivers for the increase in Gross Debt were the partial  drawdown
   of the growth facility under the  Sixth Street loan (USD 38.5 million)  to
   finance the Ege Port concession  extension, additional loans and bonds  to
   finance the expected CAPEX for  recent European acquisitions (Malta  bond,
   and bank loans at  Tarragona Cruise Port and  Canary Island Cruise  Ports,
   combined USD 25.4 million),  in addition to  accrued (PIK) interest  under
   the Sixth Street loan partially offset by scheduled loan amortizations.

   Net debt  Ex IFRS-16  Leases  was USD  497.5 million  at  the end  of  the
   Reporting Period compared to USD 435.0 million as at 31 March 2022. At  31
   March 2023,  GPH had  cash  and cash  equivalents  of USD  118.4  million,
   compared to USD 99.7 million at 31 March 2022.

   The additional Gross Debt incurred described above had no material  impact
   to Net  Debt  as  the funds  remained  on  balance sheet  as  cash  as  at
   31.03.2023 and have been invested shortly  after the end of the  Reporting
   Period (Ege  Extension) or  will  be invested  (debt raised  for  European
   expansion). The main driver of the  decrease in cash during the  Reporting
   Period was Net Capital expenditure of  USD 107.1 million, the majority  of
   which was for the  ongoing investment into  Nassau Cruise Port,  partially
   offset by operating cash flows of approximately USD 60 million, reflecting
   the growth in Adjusted EBITDA.

   Nassau Cruise Port Re-financing

   Shortly after  the  end  of  the  Reporting  Period,  Nassau  Cruise  Port
   successfully  refinanced  its  local  bond   issued  in  June  2020.   The
   refinancing resulted in an increase  in the nominal outstanding amount  to
   USD 145 million  (from USD  134.4 million) and  a reduction  in the  fixed
   coupon to 6.0% (from  8.0%), reducing the annual  interest payment by  USD
   2.0 million.  The maturity  date of  2040 remains  unchanged as  does  the
   principle repayment schedule which is ten equal annual payments from  June
   2031. The bond remains non-recourse to GPH or any other Group entity.

   Ege Port, Kusadasi Concession Extension

   Shortly after the end of the Reporting Period GPH was reached an agreement
   to extend its concession  agreement for Ege  Port, Kusadasi. The  original
   concession agreement was due  to expire in July  2033, and following  this
   extension agreement, the concession will now expire in July 2052.

   In exchange for the  extension of the  existing concession agreement,  Ege
   Port has  paid an  upfront concession  fee of  TRY 725.4  million (USD  38
   million). In addition, Ege  Port has committed to  invest up to a  further
   10% of the upfront concession fee  within the next 5 years into  improving
   and enhancing the cruise port and retail facilities at the port, and  will
   pay a variable concession fee equal to 5% of its gross revenues during the
   extension period starting after July 2033.

   The  up-front  concession  fee  payment  has  been  financed  by   partial
   utilisation, shortly before the end of the Reporting Period, of the USD 75
   million growth facility provided by Sixth Street, previously announced  on
   24 May 2021 and approved  by shareholders on 9 June  2021. As part of  the
   additional draw down with Sixth Street, GPH has issued further warrants to
   Sixth Street representing  additional 2.0%  of GPH’s  fully diluted  share
   capital (in addition to warrants issued at financial closing in July  2021
   equivalent of 9.0% of GPH’s fully diluted share capital).

   The upfront concession fee  has been funded by  a capital increase at  Ege
   Port. This capital increase was provided  by GPH only, as a result,  GPH’s
   equity stake in Ege Port has increased to 90.5% (from 72.5%).

   Malta bond issuance

   Shortly before the end of the Reporting Period, GPH, through a 100%  owned
   SPV in Malta, issued EUR 18.1 million  of unsecured bonds due 2030 at  the
   rate of  6.25% per  annum. These  bonds  are guaranteed  by GPH,  and  the
   proceeds will  be used  to partially  finance GPH’s  investment plans  for
   recent cruise port acquisitions in Europe.

   Subordinated shareholder loans

   Furthermore, GPH has received  additional, long-term funding support  from
   its  largest  shareholder  Global  Investment  Holding  in  the  form   of
   additional subordinated shareholder loans to finance project expenses  for
   expansion projects, debt service and general corporate purposes. As of the
   end of the Reporting Period, the total amount of subordinated shareholders
   loans received from GIH increased to approximately USD 25 million.

   Operational Review

   Given the strong performance of the Group and the continued growth in  the
   number of ports in the network, it was decided during the Reporting Period
   to restructure the  group’s financial  reporting. GPH will  now report  by
   geographic segment, which matches our organisational structure better.

   Americas

   GPH's operational  performance in  the Americas  in the  Reporting  Period
   includes GPH's two Caribbean ports, Antigua Cruise Port and Nassau  Cruise
   Port. Prince Rupert,  Canada, which was  added to the  network during  the
   Reporting Period, did not  welcome its first cruise  call until after  the
   end of the Reporting Period.

   Trading in the Americas region  improved strongly, with passenger  volumes
   of 4.4 million for  the Reporting Period compared  to just 1.5 million  in
   the prior Reporting Period.

   Nassau Cruise Port  benefitted from its  proximity to the  key home  ports
   in Florida and the  cruise lines'  near-term desire  to operate  a  higher
   volume than normal of short cruises in this area at the expense of  longer
   itineraries to other parts of  the Caribbean. This decision helped  Nassau
   Cruise Port report a 196% increase in cruise passengers to 3.8 million.

   Nassau Cruise  Port,  on  some  days, is  now  hosting  six  cruise  ships
   simultaneously, utilising the new berthing that was created as part of our
   significant investment into the  port. On the 27th  of February 2023,  the
   port welcomed a record 28,554 passengers in a single day.

   Our investment  in  the transformation  of  Nassau Cruise  Port  continued
   throughout the  Reporting  Period. Our  vision  for this  iconic  port  is
   becoming a reality,  and we believe  this port will  stand as a  testament
   globally to our cruise port and destination development capabilities.

   Due to the major US cruise lines  focussing on short cruises close to  the
   Southern US home ports  throughout the Winter  2022/23 cruise season,  the
   recovery rate in passenger volumes at Southern Caribbean cruise ports  was
   less strong.

   For GPH, this meant Antigua Cruise Port's cruise operations recovered at a
   slower pace than that experienced by Nassau Cruise Port. Cruise  passenger
   volumes at Antigua  Cruise Port of  556k in the  Reporting Period were  up
   135% from the 237k during the prior Reporting Period.

   Our Americas operations  achieved a milestone  in the last  year with  the
   signing of our first  cruise port concession in  North America. Signing  a
   10-year concession, with  a 10-year  extension option,  for Prince  Rupert
   Cruise Port  in British Columbia,  Canada,  is an  important step  in  our
   continued growth.

   Prince Rupert Cruise Port is located at the heart of the British Columbian
   cruise market,  just  40 miles  from Alaska,  one of  the  largest  cruise
   markets in the  world, and ideally  placed for cruise  itineraries to  and
   from the key homeports in the region: Seattle and Vancouver.

   Prince Rupert Cruise Port is expected to welcome nearly 80,000  passengers
   over  the  2023   Alaskan  summer   cruise  season.  The   port  has   the
   infrastructure and capability to handle  larger ships, and GPH expects  to
   drive a significant increase in passenger volumes in the years ahead.

   In August 2022,  GPH signed a  30-year concession agreement  for San  Juan
   Cruise Port, Puerto Rico. In  October 2022, a Memorandum of  Understanding
   was signed for a 30-year concession, with a 10-year extension option,  for
   the cruise port of  St Lucia. We  expect to welcome  these ports into  our
   network during the fiscal year 2024 Reporting Period.

   West Med & Atlantic

   GPH's operational performance for the West Med & Atlantic region  includes
   our Spanish ports Barcelona, Fuerteventura, Lanzarote, Las Palmas, Malaga,
   Tarragona and Vigo, as well as Kalundborg, Denmark, and the equity pick-up
   contribution from Lisbon and Singapore. Alicante Cruise Port will start to
   contribute in the 2024 Reporting Period.

   Overall passenger volumes were 2.9  million, an increase of 450%  compared
   to the comparable  Reporting Period. This  strong performance was  despite
   the fact  that, at  the start  of the  Reporting Period,  the recovery  in
   passenger  volumes  in  this  region   was  negatively  impacted  by   the
   uncertainty around the omicron variant  during the important 2022  booking
   season and the lower  onboard capacity limits set  by the cruise lines  as
   they ramped up operations.

   The easing of travel restrictions  as the Reporting Period progressed  led
   to increased cruise activity across our  West Med & Atlantic region.  Call
   volumes, particularly at Barcelona, the largest port in the Mediterranean,
   were strong and by the end of  2022 season close to 2019 levels.  However,
   occupancy rates,  which rose  steadily  throughout the  Reporting  Period,
   remained below industry norms. The major cruise lines expect occupancy  to
   reach 100%+ ahead of the summer season 2023.

   Barcelona Cruise Port welcomed Valiant Lady for its inaugural season,  and
   we provided our new Integrated Services Package to the ship throughout the
   season. Kalundborg Cruise  Port, Denmark,  marked a  milestone during  the
   Reporting Period when it welcomed AIDAnova, the largest ship to ever  call
   at the port.

   The West Med  & Atlantic network  grew its cruise  port footprint  further
   during the Reporting  Period. At  the beginning of  the Reporting  Period,
   Tarragona Cruise  Port  joined  the  network after  we  signed  a  12-year
   concession with a 6-year extension option. This port recently underwent  a
   EUR 30  million investment  into  the  port  infrastructure  by  the  port
   authority, including a new cruise pier  and the provision of shore  power.
   Under the terms of the concession agreement, GPH will invest into building
   a new state-of-the-art modular cruise terminal expected to cost around EUR
   5.5 million,  which will  utilise solar  power to  ensure the  sustainable
   provision of the terminal's energy needs.

   We added three  new ports to  the network when  GPH's 80:20 joint  venture
   with a local partner signed concession  agreements for three ports in  the
   Canary Islands: Las Palmas Cruise  Port (40 years), Lanzarote Cruise  Port
   (20 years)  and Fuerteventura  Cruise  Port (20  years).  As part  of  the
   agreements,  the   joint   venture  will   invest   approximately EUR   40
   million into constructing a new cruise terminal in Las Palmas and  modular
   terminal facilities  in Lanzarote  and Fuerteventura.  These three  cruise
   ports handled 1.5 million cruise passenger movements in 2019, compared  to
   0.8 million passengers handled since the  takeover late in 2022, a  period
   which was  characterized  by  the recovery  towards  pre-pandemic  levels,
   ramp-up phase by GPH and only partially covered the main winter season.

   Shortly before the end of Reporting Period, we added Alicante Cruise Port,
   Spain, when we a 15-year cruise port concession with the same partner  and
   the same joint venture structure as in the Canary Island.

   Central Med

   Our Central Med region  includes Valletta Cruise  Port, Malta, GPH's  four
   Italian ports  (Cagliari, Catania,  Crotone and  Taranto) and  the  equity
   pick-up contribution from  La Goulette,  Tunisia and  Venice Cruise  Port,
   Italy.

   Trading in this region was similar to  that experienced in the West Med  &
   Atlantic region, with cruise calls  rising strongly compared to the  prior
   Reporting Period but  with lower than-normal  occupancy levels.  Although,
   like with the  West Med,  occupancy levels  rose as  the Reporting  Period
   progressed.

   The Central Med region, driven by Valletta Cruise Port, GPH's largest port
   in this region, welcomed 1.0 million passengers in the Reporting Period, a
   significant increase from the 328k  passengers welcomed in the  comparable
   period but 26%  lower than the  1.4m welcomed  in the 12  months to  March
   2020.

   The work to complete the EUR 49.9 million Grand Harbour clean air  project
   in Valletta is progressing well. Infrastructure Malta and Transport  Malta
   are funding this project,  which includes a EUR  37 million investment  to
   provide shore power to five cruise ship quays and is expected to  complete
   shortly. We were delighted when Valletta Cruise Port was awarded  "World's
   Best Cruise Terminal for Sustainability" by the World Cruise Awards.

   Elsewhere, we extended  the concession  at Cagliari,  at no  cost, by  two
   years and Taranto Cruise Port was  awarded Destination of the Year at  the
   Seatrade Cruise Awards.

   We were delighted  when La Goulette  Cruise Port, welcomed  the return  of
   cruise passengers during the Reporting  Period. After a seven-year  break,
   this was an important moment for  La Goulette Cruise Port, the country  of
   Tunisia and all of our local stakeholders.

   East Med & Adriatic

   GPH's East Med & Adriatic operations include the flagship Turkish port Ege
   Port in Kusadasi, as well as Bodrum Cruise Port, Turkiye and Zadar  Cruise
   Port, Croatia. In this  region, the impact on  passenger volumes of  lower
   than-normal occupancy levels was outshone  by the significant increase  in
   cruise calls compared to the comparable Report Period.

   Passenger numbers  in  the  East  Med  &  Adriatic  region  were  905k,  a
   significant increase from the 21k welcomed  last fiscal year and the  351k
   in the 12 months to March 2020. This strong recovery in passenger  volumes
   was driven by the performance of our Turkish ports.

   In 2017, our Turkish ports suffered a sharp drop in passenger numbers  due
   to geo-political issues. In  early calendar year  2020, bookings from  the
   cruise lines indicated  that Ege Port  would report a  strong recovery  in
   passenger  volume  numbers.  Unfortunately,  the  onset  of  the  Covid-19
   pandemic meant this expected recovery did not materialise.

   Despite the lower-than-normal occupancy levels across the industry in  the
   Reporting Period,  the pent-up  demand to  return to  cruising to  Turkish
   ports drove the strong performance in the East Med & Adriatic region.

   During the Reporting Period,  Ege Port, Kusadasi  welcomed Odyssey of  the
   Seas, the largest ever cruise ship to call at a Turkish port. Zadar hosted
   a record four  ships simultaneously. These  achievements further  underpin
   the expected growth across the industry  in terms of the number of  cruise
   ships in the global cruise fleet and the size of those ships.

   On the  6th of  February 2023,  an earthquake  in east  of Turkiye  caused
   significant  damage  to   buildings  and  infrastructure   and  caused   a
   humanitarian crisis. The earthquake  had no impact  to our Turkish  cruise
   ports or the  communities they are  located in, but  we opened our  cruise
   ports in  Turkiye to  help  support the  relief  efforts. The  ports  were
   utilised as  logistics centers  and provided  temporary accommodation  for
   some of the victims. In all of  our destinations, we set up an  earthquake
   relief campaign in collaboration with local and international NGOs at  our
   ports.

   Other

   Our Other reporting segment  includes our commercial  port Port of  Adria,
   Montenegro, our management agreement for Ha Long Cruise Port, Vietnam  and
   the contribution from our new Port Services Businesses.

   Our Port  Services  are services  aimed  at enhancing  cruise  passengers'
   overall experience  in  the port  and  destination. Our  services  include
   Destination and Shoreside Services such  as Guest Information Centers  and
   Transportation  services,  crew  services,  Area  &  Terminal   management
   services such as Retail and Duty-Free shops and food and beverage  outlets
   and Crew Services such  as catering and  transportation services for  crew
   and crew lounges.

   We are focused on growing our  Port Services at GPH-operated cruise  ports
   and ports  operated by  third  parties. During  the Reporting  Period,  we
   provided a range  of Port  Services to  Virgin Voyages'  ships at  Spanish
   ports. At  Barcelona, we  provided and  managed an  encompassing range  of
   services directly or via third parties, including stevedoring, port agency
   and crew services.  We also provide  services at our  ports in Málaga  and
   Lisbon and an additional four non-GPH Spanish ports. This agreement is  an
   exciting development and an important first step in our ambitions to  grow
   our Port Services revenues.

   As a result of the change to our financial reporting, we no longer  report
   Port of Adria’s performance separately, reflecting our strategic focus  on
   cruise operations and the fact Port of Adria’s EBITDA contribution to  the
   Group is small. Trading at Port  of Adria was stable during the  Reporting
   Period with  single-digit growth  in  EBITDA. The  Board of  Global  Ports
   Holding continues  to  consider  its  options  regarding  Port  of  Adria,
   including its potential sale.

   Outlook

   The scheduled  launch of  new cruise  ships in  the year  ahead means  the
   number of  available berths  across  the global  cruise fleet  will  reach
   all-time highs in 2024,  and when combined  with industry occupancy  rates
   reaching pre-Covid-19 levels, the industry  will be propelled to  exciting
   new highs.

   Industry booking patterns have been rebuilt to market norms over the  last
   12 months, and all major cruise lines have reported record booking  trends
   for 2023. 

   Looking further into the future, long-established demand and supply trends
   in the cruise industry  have re-established themselves  as key drivers  of
   cruise industry growth. According to Cruise  Industry News, by the end  of
   2027, passenger capacity  in the cruise  industry is forecast  to grow  to
   over 40 million, a growth rate of 45% from pre-covid levels.

   The medium  to long-term  demand trends  have been  largely unaffected  by
   Covid-19. The  growing  appetite  for leisure  travel,  if  anything,  has
   perhaps been  increased  by Covid-19.  The  introduction of  so  many  new
   classes of cruise ships in such a short time reflects the industry's drive
   to continue attracting new customers.

   Before Covid,-19, it  was a requirement  for many cruise  ports to  invest
   significantly in their  infrastructure to  meet the needs  of the  growing
   number of cruise ships and the growing size of cruise ships as well as the
   increased demand from passengers for  an improved cruise port  experience.
   Those requirements  have  re-emerged  even stronger,  as  the  anticipated
   growth in the industry brings  exciting prospects and potential risks  for
   those involved in the  cruise port industry. Cruise  ports will face  some
   substantial obstacles due  to the  growing size  of cruise  ships and  the
   continuous growth and segmentation of the passenger base.

   GPH’s  significant  experience  and  know-how  in  port  and   destination
   development and global cruise port operations, honed from our  experiences
   worldwide, means we  are well-positioned to  play a primary  role in  this
   investment and industry growth in the years ahead.

   In the 2024 Reporting Period, we expect to welcome 11.8 million passengers
   to our consolidated  and managed  cruise port portfolio.  A more  detailed
   financial outlook  will  be  provided  when  GPH  releases  its  financial
   statements for  the Reporting  Period.  Our inorganic  growth  aspirations
   continue and we expect  to add San  Juan Cruise Port  and St Lucia  Cruise
   Port  to  the  network  in  the  2024  Reporting  Period  with  additional
   opportunities under review.

    

   ══════════════════════════════════════════════════════════════════════════

   Dissemination of a Regulatory Announcement that contains inside
   information in accordance with the Market Abuse Regulation (MAR),
   transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

   ══════════════════════════════════════════════════════════════════════════

   ISIN:          GB00BD2ZT390
   Category Code: TST
   TIDM:          GPH
   LEI Code:      213800BMNG6351VR5X06
   Sequence No.:  243497
   EQS News ID:   1632433


    
   End of Announcement EQS News Service

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