DJ Global Ports Holding PLC: Interim Results Announcement
Global Ports Holding PLC ( )
Global Ports Holding PLC: Interim Results Announcement
20-Aug-2019 / 07:00 GMT/BST
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Global Ports Holding Plc
Interim results for the six months ended 30 June 2019
Global Ports Holding announces record interim Cruise results, Group outlook for full year maintained
Global Ports Holding Plc ("GPH" or "Group"), the world's largest independent cruise port operator, today
announces its unaudited results for the six months ended 30 June 2019.
Financial H1 H1 2019 H1 2018 YoY YoY CCY
Summary 2019 Growth
CCY6 (%) Growth
(%)
Total Revenue 54.6 56.4 56.6 -3.4% -0.2%
($m) 1
Segmental 39.1 40.3 40.3 -3.1% 0.0%
EBITDA ($m) 2
Adjusted 34.8 36.0 36.1 -3.5% -0.2%
EBITDA ($m)
Operating 1.3 6.5 -80.2%
Profit ($m) 3
Profit/(Loss) (13.8) (2.1)
before tax
($m)
Profit/(Loss) (15.8) (3.6)
after tax ($m)
Underlying 0.9 12.4 -92.4%
profit for the
period ($m) 4
EPS (c) (26.0) (6.0)
Adjusted EPS 1.5 19.7
(c) 5
DPS (c) 19.9 27.9 -28.7%
Net Debt 351.1 253.1 38.7%
Net debt 290.1 253.1 14.6%
excluding
impact of IFRS
16
Overview
Group - Strong performance in Cruise offset by weakness in Commercial
· Total consolidated revenues were $54.6m in the period down 3.4% yoy (-0.2% ccy)
· Strong Cruise EBITDA growth of 14.3% (21.7% ccy) to $16.8m was offset by a decline in Commercial EBITDA
of 13.1% (12.6% ccy) to $22.3m. H1 Segmental EBITDA - down 3.1% at $39.1m (-0.0% ccy), H1 Adjusted EBITDA
- down 3.5% to $34.8m (-0.2% ccy, -4.3% ccy and before IFRS 16).
· Operating profit of $1.3m (H1 2018: $6.5m), was primarily due to $15.5m of amortisation expense in
relation to port operation rights (H1 2018 $16.0m), depreciation of right of use assets $1.2m (H1 2018:
$0.0m), amortisation $6.6m (H1 2018: $6.5m) and one off adjustments $6.9m (H1 2018: $4.2m). The total
IFRS 16 impact on operating profit is $0.4m.
· Loss after tax for the period of $15.8 million (H1 2018: $3.6m) is driven by an increase in net finance
costs to $18.4m (H1 2018: $11.4m), offset by an increase in income from equity accounted associates to
$3.3m (H1 2018: $2.7m), while tax expense increased to $1.9m (H1 2018: $1.5m). The increased net finance
costs are primarily due to non-cash loss when revaluing the Eurobond debt, along with non-cash
revaluation losses on Turkish entities foreign currency dominated liabilities. Net interest expenses
increased only slightly to $12.7m (H1 2018: $12.1m). The higher tax charge reflects higher taxable profit
contribution from cruise operations and lower taxable profits from commercial ports, which are in lower
tax jurisdictions.
· Underlying profit for the period reflects the loss after tax adjusted for the amortisation of port
operating rights $15.5m (H1 2018: $16.1m) and depreciation of right-of-use assets $1.2m (H1 2018: $0.0m).
· 2019 H1 figures are stated under IFRS 16, the adoption of IFRS 16 resulted in a positive impact to
Adjusted EBITDA of $1.5m in the period. The full year impact on Adjusted EBITDA is expected to be c$3.0m.
The H1 2019 IFRS 16 impact on depreciation is a negative $1.2m and on finance costs a negative $1.1m.
With the overall IFRS 16 negative impact on Loss before tax of $0.7m. Unless otherwise stated all 2019
figures are under IFRS 16. The group's option elected for the application of IFRS 16 as described in note
2, does not lead to a restatement of the prior year figures.
· Net debt of $351.1m (31st December 2018: $267.2m) reflects the $60.9m recognition of operating leases
on the balance sheet under IFRS 16. Excluding this impact net debt increased to $290.1m. The leverage
ratio as per GPH's Eurobond was 4.2x at 30th June 2019 (31st December 2018: 4.2x), vs a covenant of 5.0x,
this leverage ratio excludes the impact of IFRS 16.
· Significant progress was made towards the implementation of our new port investment strategy during the
period. A concession agreement was signed for Antigua and Barbuda, our JV was named preferred bidder for
Nassau and our other JV successfully bid for the port operator of La Goulette, Tunisia. All remain
conditional until such times as conditions are fulfilled. In addition, the pipeline of additional port
investment and management opportunities remains strong.
· A strategic review was announced, after period end, to explore ways to maximise value for all
stakeholders and includes a range of potential corporate activity including the sale of certain assets
as well as strategic investments and partnerships. A further announcement will be made when it is
appropriate to do so.
· Having reviewed carefully the progress made in regard to opportunities for investment in new cruise
ports the board has proposed an interim dividend of 19.9c (H1 2018: 27.9c).
Cruise - Strong H1 results
· Cruise EBITDA grew 14.3% (21.7% ccy) to $16.8m in the period, with Cruise Revenue growing 6.6% (13.3%
ccy) to $23.9m.
· The performance of both Ege Port and Valletta in the period were both particularly pleasing.
· Passenger volumes grew 26.8% yoy, with 2.1m PAX handled in the period, on an organic basis passenger
volumes grew 8.6% yoy, with the strong volume growth of 31% from Ege a particular highlight.
· Outlook for Ege Port in Turkey continues to strengthen for 2020 and 2021 and reservations for Bodrum
and Antalya cruise port in 2020 are now also showing a marked improvement.
· Significant progress made towards the implementation of our new port investment strategy during the
period.
Commercial -weak performance continues
· Commercial EBITDA fell 13.1% (12.6% ccy) to $22.3m in the period, with Commercial Revenue falling 10.0%
(9.1% ccy) to $30.8m.
· General & Bulk Cargo volumes fell 42.4% and TEU Throughput fell 14.4% in the period. Our commercial
business, particularly Port Akdeniz was impacted by global macro-economic factors in the period, leading
in particular to a decline in marble and cement volumes.
· Excluding the H1 2018 project cargo impact, Port of Adria grew EBITDA yoy, driven primarily by
continued strength in steel coil volumes.
· We continue to work on diversifying Port Akdeniz's revenue streams and driving volume to Port Adria to
capitalise on our previous capex improvements at this port. While, our commercial ports are not immune to
macro-economic factors, historically our volumes have always recovered over time.
Outlook & current trading
Looking into 2020, current booking trends are in line with our expectations, with the continued momentum in
bookings to both Ege Port and Bodrum particularly pleasing for both 2020 and 2021.
While our other cruise ports continue to perform in line with our expectations. Our work to transform the
retail experience at our ports continues to gather momentum, the new travel retail experience in Barcelona
has been well received and we are pleased to already be experiencing strong increased passenger spend.
Trading at our commercial ports was affected by the macro-economic environment, with both cargo and
container volumes weak in the period and so far in Q3 volumes have remained weak.
We expect to deliver low single digit growth in organic adjusted EBITDA10 for the full year.
Emre Sayin, Chief Executive Officer said;
"We have seen another record performance from our Cruise business in the first half of the year, with
strong growth in passenger volumes translating into strong growth in Cruise EBITDA. We are pleased with the
significant progress made in our new port investment strategy and expect to achieve further significant
progress in the second half of the year.
Our commercial ports are not immune to macro-economic factors and as a result recent trading has been
challenging. Our previous experience suggests that the trading performance will improve over time and we
continue to work to diversify the revenue streams at our commercial ports.
Trading since the period end at our Cruise ports has continued to be in line with our expectations, while
weak trading trends at our Commercial ports have thus far continued into H2 2019. We expect to deliver low
single digit growth in organic EBITDA for the full year."
Notes- For full definitions and explanations of each Alternative Performance measures in this statement
please refer to Note 2f
1) All $ refers to United States Dollar unless otherwise stated
2) Segmental EBITDA is calculated as income/(loss) before tax after adding back: interest; depreciation;
amortisation; unallocated expenses; and specific adjusting items
3) Adjusted EBITDA calculated as Segmental EBITDA less unallocated (holding company) expenses
4) Underlying Profit is calculated as profit / (loss) for the year after adding back: amortization
expense in relation to Port Operation Rights and the one-off expenses related to the IPO and deduction of
reversal of replacement provisions
5) Adjusted earnings per share is calculated as underlying profit divided by weighted average number of
shares
6) Performance at constant currency is calculated by translating foreign currency earnings from our
consolidated cruise ports, management agreements and associated ports for the current period into $ at
the average exchange rates used over the same period in the prior year.
7) Passenger numbers refer to consolidated and managed portfolio consolidation perimeter, hence it
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excludes equity accounted associate ports Venice, Lisbon and Singapore
8) Revenue allocated to the Cruise segment is the sum of revenues of consolidated and managed portfolio
9) EBITDA allocated to the Cruise segment is the sum of EBITDA of consolidated cruise ports and pro-rata
Net Profit of equity accounted associate ports Venice, Lisbon and Singapore and the contribution from the
Havana management agreement
10) Organic adjusted EBITDA growth is growth in adjusted EBITDA excluding the contribution from ports
that were not in the portfolio for the full 12 months of the previous period
Notes to Editors
GPH is the world's largest cruise port operator with an established presence in the Mediterranean,
Caribbean, Atlantic and Asia-Pacific regions. GPH was established in 2004 as an international port operator
with a diversified portfolio of interests in cruise and commercial ports. As an independent cruise port
operator, the group holds a unique position in the cruise port landscape, positioning itself as the world's
leading cruise port brand, with an integrated platform of cruise ports serving cruise liners, ferries,
yachts and mega-yachts. As the world's sole cruise ports consolidator, GPH's portfolio consists of
investments in or management of 15 cruise ports and two commercial ports in 9 countries and continues to
grow steadily. 8.5 million cruise passengers globally were handled across our portfolio of cruise ports in
2018. The group also offers commercial port operations which specialise in container, bulk and general
cargo handling.
For further information, please contact:
CONTACT
For investor and analyst For media enquiries:
enquiries:
Global Ports Holding, Investor Brunswick Group LLP
Relations
Martin Brown, Investor Azadeh Varzi and Imran Jina
Relations Director
Telephone: +44 (0) 7947 163 Telephone: +44 (0) 20 7404 5959
687
Email: Email: GPH@brunswickgroup.com
martinb@globalportsholding.com
A copy of this report will be available on our website www.globalportsholding.com [1] today from 0700hrs
(BST).
Investor Presentation
An analyst and investor call will be held today at 9.30am,
Dial-in Number: +44 207 194 3759
PIN: 28143813#
Access to the slide presentation will be available at
http://www.globalportsholding.com/reports-presentations [2]
Key H1 H1 2019 H1 2018 YoY Growth YoY CCY
Financials 2019 CCY6 (%) Growth (%)
Total Revenue 54.6 56.4 56.6 -3.4% -0.2%
($m)
Cruise 23.9 25.4 22.4 6.6% 13.3%
Revenue ($m)
8
Commercial 30.8 31.1 34.2 -10.0% -9.1%
Revenue ($m)
Segmental 39.1 40.3 40.3 -3.1% 0.0%
EBITDA ($m)
Cruise EBITDA 16.8 17.9 14.7 14.3% 21.7%
($m) 9
Commercial 22.3 22.4 25.6 -13.1% -12.6%
EBITDA ($m)
Adjusted 34.8 36.0 36.1 -3.5% -0.2%
EBITDA ($m)
Segmental 71.6% 71.4% 71.3%
EBITDA Margin
Cruise Margin 70.5% 70.6% 65.8%
Commercial 72.4% 72.0% 74.9%
Margin
Adjusted 63.7% 63.8% 63.8%
EBITDA Margin
Profit/(Loss) (13.8 (2.1)
before tax )
($m)
KPIs
Passengers (m 2.06 1.63 26.8%
PAX) 7
General & 458 795 -42.4%
Bulk Cargo
('000 tons)
Container 106 123 -14.4%
Throughput
('000 TEU)
Please refer to Footnotes above or for full definitions and explanations of each measure in this statement
please refer to the Glossary of Alternative Performance Measures
Group performance review
Group performance in the first half of 2019 was marginally weaker than the same period last year, with
group revenue down 3.4% (-0.2% in constancy currency) to $54.6m (H1 2018: $56.6m) and Adjusted EBITDA down
3.5% (-0.2% in constant currency) to $34.8m (H1 2018: $36.1) with underlying profit falling 92.4% to $0.9m
and loss after tax of -$15.8m.
The adoption of IFRS 16 resulted in a total Adjusted EBITDA positive impact of $1.5m in the period and the
full year Adjusted EBITDA impact is expected to be c$3.0m. Further details on the impact of IFRS 16,
including a segmental breakdown of the EBITDA impact is provided in Note 3 to these financial statements.
All 2019 figures in this statement are under IFRS 16 unless otherwise stated, prior year figures are not
restated for IFRS 16.
The first half of our financial year is typically lower in terms of cruise passenger volumes due to the
seasonally low Q1, hence trends during first half are not fully informative for full-year trends.
Nevertheless, we are very pleased to have grown cruise passenger volumes by 26.8% to 2.06m cruise
passengers (H1 2018: 1.6m, FY 2018: 4.4m), with strong organic passenger growth of 8.6%. While at all
ports, including equity accounted associate ports Venice, Lisbon and Singapore, we welcomed 3.3m passengers
(H1 2018: 2.7m, FY 2018: 8.4m), growth of 21.2%.
Cruise Revenue in the first half grew by 6.6% $23.9m (H1 2018: $22.4m, FY 2018: $54.9m), and Cruise EBITDA
grew by 14.3% to $16.8m, in line with our expectations. This strong performance was broad based, with
particularly pleasing growth from both Valletta and Ege Port in the period, delivering EBITDA growth of 46%
and 44% respectively. With the performance from Ege Port strongly supporting the outlook for growth in
Turkish cruise passenger volumes in both 2019 and 2020. On a constant currency basis, first half cruise
revenue was $25.4m and Cruise EBITDA was $17.9m.
The performance of our Commercial Port operations in the period was disappointing and underperformed
compared to our original expectations. Commercial revenues fell by 10.0% to $30.8m in the period (H1 2018:
$34.2m, FY 2018: $69.9m). Revenues from Port Akdeniz fell by 6.1% while Port Adria's revenue fell by 27.5%,
reflecting the previously highlighted absence of wind turbine project cargo in 2019.
Commercial EBITDA fell by 13.1% to $22.3m, with both ports reporting a decline. Port Akdeniz delivered a
reported decline in EBITDA of 10.6% to $20.7m, with General & Bulk cargo volumes remaining weak in Q2 and
Container volumes weakening in Q2 vs a stable performance in Q1.
Port of Adria reported an EBITDA decline of 36.3% to $1.6m. However, excluding the one off positive impact
of project cargo in H1 2018, Port Adria's underlying performance was positive. Ex project cargo EBITDA grew
35%, and on an ex project cargo and pre IFRS 16 basis EBITDA still grew 15.7%. Despite the significant drop
in volumes and revenue our Commercial EBITDA margin fell by just 260bps to 72.4%.
Central costs increased in the period, rising by 1.0% compared to an 89% increase in H1 2018 and a 34%
increase in FY 2018. While underlying central costs increased by 12.2% ex the positive impact of the weaker
Turkish Lira vs USD and IFRS 16, the reduction in in the underlying growth rate reflects that our
significant investment in central costs, including the strengthening of the management team began to
annualise in the period.
Loss after tax for the period of $15.8 million (H1 2018: $3.6m) is driven by an increase in net finance
costs to $18.4m (H1 2018: $11.4m), offset by an increase in income from equity accounted associates to
$3.3m (H1 2018: $2.7m), while tax expense increased to $1.9m (H1 2018: $1.5m). The increased net finance
costs are primarily due to non-cash loss when revaluing the Eurobond debt, along with non-cash revaluation
losses on Turkish entities foreign currency dominated liabilities. Net interest expenses increased only
slightly to $12.7m (H1 2018: $12.1m). The higher tax charge reflects higher taxable profit contribution
from cruise operations and lower taxable profits from commercial ports, which are in lower tax
jurisdictions.
Since the period end we have announced that in light of the emerging opportunities in our cruise business
that we were undertaking a strategic review of the Group. The purpose of the strategic review is to explore
ways to maximise value for all stakeholders and includes a range of potential corporate activity including
a sale of certain assets as well as strategic investments and partnerships. The process remains at an early
stage and there can be no certainty as to the final outcome. A further announcement will be made when it is
appropriate to do so.
During the period we made significant progress with our new port investment strategy during the period. A
concession agreement was signed for Antigua and Barbuda, our JV was named preferred bidder for Nassau and
our other JV successfully bid for the port operator of La Goulette, Tunisia. While each of these new
projects has still to complete, we are confident that successful financial conclusion and final agreements
will be reached.
In addition to these projects, we are also in the final stages of completing the purchase of the Autoridad
Portuaria de Malagas's (Malaga Port Authority) 20.0% holding in the Malaga cruise port concession for
EUR1.5m. This will take Creuers ownership to 100% of the Malaga cruise port concession and GPH's effective
ownership to 62%.
Cruise Ports Business Review
The long term growth fundamentals of the cruise industry continue to provide a very supportive back drop
for our cruise business. The global cruise ship order book, currently sits at a record high of 124 new
ships on order for delivery between 2019-2027, an increase of 10% in 12 months.
Based on current known orders and the greater size of new ships once completed, this implies the average
global cruise passenger growth rate is c4-5% per annum over the medium term according to Cruise Industry
News, with new supply arguably creating its own demand.
In the near term there is a significant number of cruise ships that are likely to sail in the Caribbean or
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Europe set for delivery over the remainder of 2019, 2020, 2021 and 2022. We look forward to welcoming these
cruise ships to our ports in the years ahead.
While the order book provides visibility over the long term growth rate, the long lead time on cruise
holiday bookings vs land based tourism and cruise lines ability to manage yields means visibility over
passenger volumes over the short term is also strong.
Cruise Port H1 H1 2019 H1 2018 YoY Growth YoY CCY
Operations 2019 CCY6 (%) Growth (%)
Revenue (USD m) 23.9 25.4 22.4 6.6% 13.3%
Segmental 16.8 17.9 14.7 14.3% 21.7%
EBITDA (USD m)
Segmental 70.5% 70.6% 65.8%
EBITDA Margin
Passengers (m)1 2.1 - 1.63 26.8%
Turnaround 0.7 0.7 9.7%
Passengers
Transit 1.3 1.0 38.5%
Passengers
Yield (USD, rev 11.6 12.3 13.8 -16.0% -10.6%
per pax)
The first half of our financial year is currently lower in terms of cruise passenger volumes vs the second
half due to the fact it includes the seasonally low Q1 for cruise in the Mediterranean. Despite the
seasonal low, we still welcomed 2.1m (H1 2018: 1.6m, FY 2018: 4.4m) cruise passengers to our consolidated
and managed cruise ports in the period, a pleasing growth rate of 26.8%. On an organic basis, which
excludes the impact of our management agreement in Havana, our passenger volume growth rate was 8.6% vs
9.2% in H1 2018. At all ports including equity accounted associate ports Venice, Lisbon and Singapore we
welcomed 3.3m (H1 2018: 2.7m, FY 2018: 8.4m).
In the first half Cruise Revenue increased 6.6% to $23.9m vs H1 2018 $22.4m and Cruise Segmental EBITDA
once again grew faster than revenue, delivering growth of 14.3% to $16.8m (H1 2018: $14.7m). The revenue
from our cruise ports are almost exclusively Euro based at present, with most ports also incurring costs in
Euros, with the exception of our Turkish ports which have a largely USD revenue base and Turkish Lira cost
base. On a constant EUR/$ currency basis the first half cruise performance was even stronger, with revenue
growth of 13.3% to $25.4m and Cruise EBITDA growth of 21.7% to $17.9m. Excluding the performance of our
equity accounted associates (Venice, Lisbon and Singapore), with a pro-rata net income contribution at the
Cruise EBITDA level of $3.3m (H1 2018: $2.7m), Cruise EBITDA grew by 12.6% yoy.
We continue to drive growth in on our ancillary revenues, with three main areas of focus: port services;
retail and rental services; and passenger and destination services. There were some important developments
in the period in this area of the business, most notably in Retail and Rental Services, with the opening of
new immersive travel retail in two of the terminals at Barcelona. The new areas have received positive
feedback from passengers and the uplift in associated revenue has been very pleasing. Since the period end
we issued an RFP for the retail and duty free areas for four of our ports, Malaga, Zadar, Cagliari and
Catania. We look forward to receiving submissions in Q3 before deciding on the best way forward for these
ports.
While our plans to grow our Port Services revenues continues to progress, our port service evaluation
process identified tailored services that we could introduce at each relevant port in order to allow us to
offer an integrated service package to cruise passengers and cruise ships. Having concluded the review, we
have focussed our actions on a number of our larger ports and we are taking action to fill any gaps in our
offering at these ports. While our Destination Services offering continues to see us drive improvements in
the service we offer passengers through our Guest Information Centers (GICs).
The last couple of years have been challenging for our Turkish cruise ports, however our 'active patience'
approach of continuing to invest in our facilities and a step up in our marketing in 2018 is beginning to
deliver, with a 31% growth in passengers in H1 2019 at Ege Port, our key Turkish port. During the period,
we hosted the MedCruise General Assembly at Ege Port, providing a great platform to reenergise the
industry's interest in the port and region. We currently expect a slightly higher growth in passenger
volumes at Ege Port in H2 2019, with passenger volume growth in 2020 currently expected to be even higher.
During H1 we reorganised the management of our cruise operations under a new regional structure, with the
creation of three regions, East Mediterranean, West Mediterranean and Americas regions. This new structure
reflects our growing global operations, including our pipeline of new port investments, and will help us
maintain operational discipline while providing a strong platform for our next stage of growth.
During the period significant progress was made towards the implementation of our new port investment
strategy, we signed a 30-year concession agreement for Antigua and Barbuda, our joint venture was awarded
the cruise port tender for Nassau, Bahamas and our joint venture was notified that its bid for the operator
of La Goulette, Tunisia had been successful.
We are in the final stages of full financial closure in Antigua & Barbuda and now expect this to be
achieved before the end of Q3 2019. We look forward to welcoming this port and the c800k passengers that
visit every year into our portfolio shortly.
Nassau, Bahamas is one of the largest cruise ports in the world and welcomes 3.7m passengers per annum. We
remain in advanced stage discussions with local and international banks over long term bank financing for
the concession. Signing of the concession agreement, full financial closure and commencement of the
concession is expected to occur before the end of 2019.
Our joint venture with MSC Cruises S.A was successful in acquiring Goulette Shipping Cruise, the company
that operates the cruise terminal in La Goulette, Tunisia during the period. Full closure and commencement
of the concession is expected in Q4 2019.
All remain conditional until such times as all conditions are fulfilled. In addition to new port
investments we continue to work on securing concession extensions at a number of our ports in our current
portfolio.
Creuers H1 2019 H1 2019 H1 2018 YoY Growth YoY CCY
(Barcelona and CCY6 (%) Growth (%)
Malaga)
Revenue (USD m) 12.5 13.4 13.3 -6.3% 0.2%
Segmental 7.7 8.3 8.0 -3.7% 3.1%
EBITDA (USD m)
Segmental 61.7% 61.7% 60.1%
EBITDA Margin
Passengers (m)1 1.04 1.02 1.7%
Turnaround 0.56 0.58 -3.7%
Passengers
Transit 0.48 0.44 8.7%
Passengers
Yield (USD, rev 12.0 12.9 13.0 -7.9%
per pax)
Creuers (Barcelona & Malaga), in line with our expectations, grew passenger volumes by 1.7% in the period,
welcoming 1.0m (H1 2018: 1.0m) passengers in H1 2019. Revenue of $12.5m (H1 2018: $13.3m) was down 6.3%
yoy, although in constant currency terms revenue increased 0.2%.
Despite the modest passenger growth, the change in the passenger mix, with Malaga experiencing a sharp drop
in turnaround passengers in the period, negatively impacted passenger yields, revenues and EBITDA in the
period. Creuers delivered EBITDA for the period of $7.7m (H1 2018: $8.0m), down 3.7% yoy, on a constant
currency basis EBITDA grew 3.1%.
During the period we opened the new retail and duty free areas in two terminals in Barcelona in partnership
with our concessionaire. The results have been impressive, with passenger feedback very positive on the new
immersive retail areas and most importantly sales have risen strongly. In Malaga we will shortly undertake
a refurbishment of the cafeteria area of the Palmeral terminal, further improving the passenger experience.
We are also taking action to offer a "one stop shop" integrated service package to cruise lines at both
ports.
We are also in the final stages of completing the purchase of the Autoridad Portuaria de Malagas's (Malaga
Port Authority) 20.0% holding in the Malaga cruise port concession for EUR1.5m. This will take Creuers
ownership to 100% of the Malaga cruise port concession and GPH's effective ownership to 62%. As well as
changing the financial ownership, we believe this action will allow us to drive additional operational
improvements at the port.
Valletta H1 2019 H1 H1 YoY YoY
Cruise Port 2019 2018 Growth CCY
CCY6 (%) Growth
(%)
Revenue (USD m) 6.2 6.7 5.7 10.1% 17.8%
Segmental EBITDA (USD m) 3.7 4.0 2.5 46.3% 56.6%
Segmental EBITDA Margin 59.6% 59.6% 48.3%
Passengers (m)1 0.39 0.28 39.8%
Turnaround Passengers 0.11 0.1 79.5%
Transit Passengers 0.29 0.22 29.2%
Yield (USD, rev per pax) 15.8 16.9 20.1 -21.3%
Valletta performed very strongly during the period, with passenger growth of 39.8% to 0.39m (H1 2018:
0.28m). Revenue for the period grew 10.1% to $6.2m (H1 2018: 5.7m) or 17.8% in constant currency terms.
EBITDA grew 46.3% in the period to $3.7m (H1 2018: $2.5m), with constant currency growth of 56.6%.
The divergence in revenue growth from passenger growth is primarily driven by passenger spending habits at
our self-managed travel retail offering and our area management revenues. Within the passenger mix in the
period, there was particularly strong growth in turnaround passengers, while turnaround passengers tend to
generate higher port services revenues, their retail spend tends to be far lower. With this impact felt
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more acutely in Valletta compared to our other ports given that we self-manage the travel retail operation.
The area management revenues at Valletta such as rent from waterfront restaurants are not directly related
to passenger volume, therefore do not rise or fall in line with passenger growth. Our primary port revenues
grew in line with passenger growth.
After a challenging and weather impacted 2018, it has been pleasing to see Valletta return to form in such
a manner. Looking into H2 2019 the passenger volume growth should normalise.
Ege Port H1 2019 H1 2019 H1 2018 YoY Growth YoY CCY
CCY6 (%) Growth (%)
Revenue (USD m) 2.3 2.3 1.7 32.4% 32.4%
Segmental 1.4 1.4 0.9 43.5% 43.5%
EBITDA (USD m)
Segmental 59.0% 59.0% 54.5%
EBITDA Margin
Passengers (m)1 0.08 0.06 30.9%
Turnaround 0.01 0.01 -3.4%
Passengers
Transit 0.07 0.05 36.8%
Passengers
Yield (USD, rev 28.3 28.0 1.1%
per pax)
The last few years have been particularly challenging for our Turkish cruise ports, however as we have
highlighted for some time, 2019 is the starting point for the recovery in passenger volumes. This start of
this recovery can be seen in the 30.9% growth in cruise passenger volumes in the period. This strong volume
growth translated into revenue growth of 32.4% to $2.3m (H1 2018: $1.7m), with our Turkish ports now
charging in USD there was no translational FX impact in the period.
EBITDA of $1.4m (H1 2018: $0.9m) was up 43.5% year on year, with the uplift in the margin to 59.0% helped
by the positive impact the weak Turkish Lira given the predominately Turkish Lira cost base at the port.
Looking into H2 2019, the passenger volume growth rate should be higher than in H1 2019 but more
importantly, looking into 2020 the passenger growth rate should accelerate yoy as the recovery trend
continues to build, while 2021 already shows growth on 2020 reservations.
Other Cruise H1 2019 H1 2019 H1 2018 YoY Growth YoY CCY
CCY6 (%) Growth (%)
Revenue (USD m) 2.8 3.0 1.6 72.7% 84.9%
Segmental 4.0 4.3 3.2 25.3% 34.1%
EBITDA (USD m)
Passengers (m)1 0.54 0.26 111.5%
Turnaround 0.05 0.01 376.8%
Passengers
Transit 0.50 0.25 100.5%
Passengers
Other Cruise revenue reflects the revenue contribution of our smaller cruise port concessions and our
management agreement in Havana. While Other Cruise EBITDA reflects the EBITDA contribution of smaller
cruise port concessions and our management agreement in Havana, as well as the net income contribution of
our equity associate ports (Venice, Lisbon and Singapore).
Cruise passenger volumes grew 111.5% in the period, although on an organic basis passenger volumes fell
3.3%. Revenue grew 72.7% in the period, 84.9% in constant currency, on an organic basis revenue grew 22.0%
to $2.0m. EBITDA grew 25.3% to $4.0m, on an organic basis EBITDA grew 11.7%.
During the period US authorities prohibited authorised travel via cruise ships under the People to People
program, leading to the US cruise lines to redeploy cruise ships away from Havana. Our management agreement
is focussed on us advising on cruise port operation best practice for Havana cruise port, GPH has not
invested in the port. We continue to monitor the situation and are actively engaged with all stakeholders.
In light of the redeployment of US cruise lines we do not expect a material contribution from this
management agreement in the foreseeable future.
Our equity accounted associate ports, Venice, Lisbon and Singapore once again performed well, reporting
total PAX growth of 12.9% to 1.2m (H1 2018: 1.1m). Overall the pro-rata net income contribution from our
equity accounted associate ports contributed to Other Cruise EBITDA was $3.3m (H1 2018: $2.7m) during the
period, a growth rate of 21.6% on the same period last year.
Commercial Ports Business Review
H1 2019 has proven to be a challenging period for our Commercial ports business, with Port Akdeniz in
particular suffering from weak general and bulk cargo volumes throughout the period and weak container
volumes in Q2. Our commercial ports are not immune to the impact of macro-economic factors such as trade
tariffs and their associated impact on global trade in general and we believe the general uncertainty
around global trade has been the primary driver of the slowdown experienced by Port Akdeniz.
Commercial H1 H1 2019 H1 2018 YoY Growth YoY CCY
2019 CCY6 (%) Growth (%)
Revenue (USD m) 30.8 31.1 34.2 -10.0% -9.1%
Segmental 22.3 22.4 25.6 -13.1% -12.6%
EBITDA (USD m)
Segmental 72.4% 72.0% 74.9%
EBITDA Margin
General & Bulk 458 795 -42.4%
Cargo ('000)
Throughput 106 124 -14.6%
('000 TEU)
Yield (USD, 7.4 9.0 -16.9%
Revenue per
tonnes)
Yield (USD, 168.1 176.3 -4.6%
Revenue per
TEU)
Our Commercial port operations delivered a decline in revenue of 10.0% to $30.8m (H1 2018: $34.2m). While
Commercial EBITDA fell by 13.1% to $22.3m (H1 2018: $25.6m). Overall our volumes were weak in the period,
with General and Bulk cargo volumes declining by 42.4% and Throughput container volumes falling by 14.6%,
this overall volume decline was driven a fall in volumes at Port Akdeniz.
In terms of yields, total throughput container yields were down 4.6%, while cargo yields were down 16.9%,
with the drop in cargo yields reflecting the impact of Port Adria's project cargo in H1 2018. Port Akdeniz
benefitted from the weakness in Turkish Lira due to the port's cost structure being around 70% in local
currency, while revenues are almost exclusively in $. However, while the weak Turkish Lira generated a
direct benefit, there was also an unsubstantiated indirect cost in terms of the uncertainty created by the
volatility and weakness in the Turkish Lira.
Port Akdeniz H1 2019 H1 2019 H1 2018 YoY Growth YoY CCY
CCY6 (%) Growth
(%)
Revenue (USD m) 26.3 26.3 28.0 -6.1% -6.1%
Segmental 20.7 20.7 23.1 -10.6% -10.6%
EBITDA (USD m)
Segmental 78.7% 78.7% 82.7%
EBITDA Margin
General & Bulk 335 695 -51.8%
Cargo ('000)
Throughput 80 98 -18.7%
('000 TEU)
Yield (USD, 6.4 6.5 -1.0%
Revenue per
tonnes)
Yield (USD, 188.1 194.1 -3.1%
Revenue per
TEU)
Port Akdeniz, our largest commercial port, reported a revenue decline of 6.1% to $26.3m (H1 2018: $28.0m),
with EBITDA declining 10.6% to $20.7m (H1 2018: $23.1m) and the EBITDA margin fell to 78.7%.
General & Bulk Cargo volumes fell sharply, declining by 51.8%, albeit the rate of decline in Q2 moderated
vs Q1. Throughput container volumes fell by 18.7% in the period, with Q2 volumes down sharply after a
stable performance in Q1. Total marble volumes fell by 22.1% in the period, with import containers also
down sharply, falling 21.6%. The small decline in yields reflects the product and services mix in the
period rather than a change in the underlying pricing.
While the expansion of the free trade zone has had an impact on volumes in some General & Bulk cargo,
particularly in bagged cement and barite, we believe the largest driver of volume declines has been the
macro-economic environment. Global trade tariffs and barriers to trade in general are harmful to trade
volumes and we believe the general uncertainty around global trade, particularly involving China, has been
a primary driver of the slowdown experienced by Port Akdeniz.
Looking into H2 2019, the outlook for both General & Bulk cargo volumes and Throughput container volumes
continues to look uncertain. An agreement to end the current escalation of trade tariffs and barriers
involving China and a general improvement in Chinese GDP growth are, we believe, the most likely catalysts
for a meaningful improvement, particularly in Throughput container volumes. Our previous experience
suggests that the trading performance will improve over time and we continue to work to diversify the
revenue streams at our commercial ports.
As previously disclosed, on 29 April 2019, the Competition Authority of the Republic of Turkey notified
Global Ports Holding's subsidiary in Turkey, Ortadogu Antalya Liman Isletmeleri A.S ("Port Akdeniz"), that
it has commenced an investigation into Port Akdeniz due to an alleged breach of Article 6 of the Law on the
Protection of Competition, Law No. 4054 due to excessive pricing concerns on certain services. Further to
our statement in Q1, Ortadogu Antalya Liman Isletmeleri A.S ("Port Akdeniz") has submitted the first set of
defence on 28 May 2019. By law, the Competition Authority of the Republic of Turkey has 6 months from the
submission date to evaluate the defences and prepare an investigation report. The Competition Authority
may, at its sole discretion, extend the preparation period by additional 6 months. A further announcement
will be made when it is appropriate to do so.
Port Adria H1 H1 2019 H1 2018 YoY Growth YoY CCY
2019 CCY6 (%) Growth (%)
Revenue (USD m) 4.5 4.8 6.2 -27.5% -22.4%
Segmental 1.6 1.7 2.5 -36.3% -31.8%
EBITDA (USD m)
Segmental 35.0% 35.0% 39.9%
EBITDA Margin
General & Bulk 122.7 100.1 22.6%
Cargo ('000)
Throughput 25.9 25.6 1.2%
('000 TEU)
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Yield (USD, 10.3 26.2 -58.1%
Revenue per
tonnes)
Yield (USD, 106.6 108.2 -1.6%
Revenue per
TEU)
While at the headline level Port of Adria's performance in the period looks disappointing, there was a
number of one offs that impacted the performance, most notably the project cargo impact in H1 2018.
Excluding this impact, the underlying performance was positive.
Revenue fell 27.5% in the period to $4.5m (H1 2018: $6.2m) and EBITDA fell 36.3% to $1.6m (H1 2018: $2.5m).
However, excluding the one off positive impact of project cargo in H1 2018, revenue fell by 5.7%, while
underlying EBITDA increased by 35.0%. On a pre-IFRS 16 basis, the underlying EBITDA growth was still an
impressive 15.7%, reflecting lower costs
General & Bulk Cargo volumes rose an impressive 22.6% in the period, driven primarily by the continued
strength in steel coil exports which has followed the completion of an investment programme by the
manufacturer. While Throughput container volumes rose a more modest 1.2%.
We continue to work on growing the volumes at this port and remain in talks with a number of parties, both
importers and exporters about introducing new cargoes at the port during 2019.
Brexit
It looks increasingly likely that UK will exit the EU in the coming months and while the indirect impact on
any business cannot be known for sure, we believe that Brexit does not pose a material issue for the group,
either directly or indirectly. The long lead times on the booking of cruise holidays and the consistently
high rates of occupancy achieved by cruise lines are supportive of our view. We also note recent comments
from major cruise lines on their confident outlook for the rest of 2019 and 2020. We do not believe our
commercial business has any significant direct exposure to any fall out from Brexit. While of course any
wider impact on economic confidence and global trade could have an indirect impact on our commercial ports,
we believe this impact would be limited. The group has no port operations in the UK.
Financial Overview
Loss after tax for the period of $15.8 million (H1 2018: $3.6m) is driven by an increase in net finance
costs to $18.4m (H1 2018: $11.4m), offset by an increase in income from equity accounted associates to
$3.3m (H1 2018: $2.7m), while tax expense increased to $1.9m (H1 2018: $1.5m). The increased net finance
costs are primarily due to non-cash loss when revaluing the Eurobond debt, along with non-cash revaluation
losses on Turkish entities foreign currency dominated liabilities. Net interest expenses increased only
slightly to $12.7m (H1 2018: $12.1m). The higher tax charge reflects higher taxable profit contribution
from cruise operations and lower taxable profits from commercial ports, which are in lower tax
jurisdictions.
Specific Adjusting Items in Operating Profit
As of 30 June 2019, specific adjusting items comprising project expenses amounting to $4.7m (H1 2018:
$3.6m), provisions $1.0m (H1 2018: $0.3m) and other specific adjustment items $1.2m (H1 2018: $0.3m) Please
see note 2 f in the interim condensed consolidated financial statements for more details.
Finance Costs
The Group's net finance charge in the period was $18.4m, an increase on the $11.4m charge in H1 2018. This
increase was primarily due to the Turkish Lira depreciation against $ in the year, which creates a foreign
exchange charge and gain on liabilities and assets respectively.
This occurs for two reasons. Firstly, the group's Eurobond is issued by Global Liman, a 100% owned entity
within the group with a functional currency of Turkish Lira. When the Turkish Lira depreciates against the
$ a non-cash foreign exchange loss occurs when revaluing the Eurobond debt, while a non-cash foreign
exchange gain should occur if the Turkish Lira appreciates against the $. Secondly, although all our
Turkish ports charge in $, they must legally keep the accounting books in Turkish Lira, so when the Turkish
Lira depreciates against the $ this results in non-cash foreign exchange losses on revaluing the Turkish
entities' foreign currency denominated liabilities and non-cash foreign exchange gains on revaluing the
Turkish entities foreign currency assets.
During the period net finance expenses increased to $29.0m (H1 2018: $22.3m), primarily due to a non-cash
foreign exchange loss when revaluing the Eurobond debt of $13.1m (H1 2018: $9.3m), net interest expenses
increased slightly to $12.7m (H1 2018: $12.1m) and interest expenses on lease obligations increased to
$1.7m (H1 2018: $0.1m) with $1.1m of this increase due to the adoption of IFRS 16 in the period.
Finance income fell to $10.5m (H1 2018: $10.9m), primarily as a result of a drop in the non-cash foreign
exchange gains on Turkish entities' TL costs base to $9.7m (H1 2018: $10.0m).
Taxation
Global Ports Holding is a multinational group and as such is liable for taxation in multiple jurisdictions
around the world. The Group's underlying tax charge for the period was $1.9m (H1 2018: $1.5m), representing
an effective underlying tax charge of 21.02% (H1 2018: 16.22%). The higher tax charge compared with prior
years is primarily the result of higher taxable profits in our Cruise business which is primarily based in
higher tax jurisdictions in Europe and the lower taxable profit contribution from our commercial ports
which are based in lower tax jurisdictions.
Earnings Per Share
The Group's basic earnings per share was -26.0c (H1 2018: -6.0c), this decrease is in line with the decline
in profit for the year attributable to owners of the company -$16.3m (H1 2018: -$3.8m). Adjusted earnings
per share of 1.5c (H1 2018: 19.7c), reflects the decline in the underlying profit measure, which is
calculated as (loss)/profit for the period after removing the impact of the amortisation of port operating
rights and depreciation of right of use assets.
Cash Flow and Investment
Operating cash flow was -$1.3m (H1 2018: $24.5m). The decrease in operating cash flow is primarily related
to an increase in working capital of $24.3m. This increase was driven by short term cash collaterals for
new projects of $12.4m (H1 2018: nil), a receivable related to a change in port agent in Barcelona of $4.3m
(H1 2018: nil) and a period end timing issue over receipt of a $1.5m payment related to our oil services
contract in Port Akdeniz. Since period end the short term cash collateral has been returned and the
receivables related to the change in port agent and the oil services contract have been received.
Capital expenditure during the period was $5.7m, broadly in line with the $5.6m incurred in H1 2018. In H1
2019 the group spent approximately $2.6m in Port Akdeniz on work related to the TPAO project, $1.1m in Port
Adria on infrastructure enhancements, $1.0m in Creuers mostly on remodelling of terminals and security and
$0.8m in Valletta on canopy investment.
Balance Sheet
At 30th June 2019 net debt was $351.1m (31st December 2018: $267.2m) This increase was driven by the $60.9m
impact of recognising operating leases on the balance sheet under IFRS 16 and the decrease in cash as
explained on the cash flow and investment above. The group's Net Debt/Adjusted EBITDA ratio was 4.3x times
as at 30th June 2019 (31st December 2018: 3.2x). Excluding the IFRS 16 impact net debt increased to $290.1m
(31st December 2018: $267.2m) and the Net Debt/Adjusted EBITDA ratio was 3.6x.
Gross debt at period end was $410.0m (31st December 2018: $347.1m), with this increase driven by the
adoption of IFRS 16, excluding this impact, gross debt was $349.0m. The Leverage Ratio as per GPH's
Eurobond was 4.2x at 30th June 2019 (31st December 2018: 4.2x), vs a covenant of 5.0x, the leverage ratio
excludes the IFRS 16 impact, in line with the bond descriptions.
Impact of Foreign Currency Movements
All of GPH's European and Adriatic cruise ports operate in Euros, with the majority of costs being in Euros
at our non-Turkish cruise ports. Our Commercial port, Port of Adria receives revenues in Euros and the
majority of its costs are incurred in Euros. The translation of profits from these port operating entities
are not hedged and as a result, the movement of the US dollar and Euro exchange rates directly affects the
Group's reported results.
The vast majority of our revenues at our Turkish cruise ports are in US Dollars, while the majority of
costs are in Turkish Lira. Our Commercial port, Port of Antalya, receives revenues in US Dollars and c70%
of its costs are incurred in Turkish Lira. The group does not hedge this exposure as a result, the movement
of the US dollar exchange rates to the Turkish Lira directly affects the Group's reported results.
In the first half of 2019, the group was impacted by unfavourable movements against the prior year in
respect of the US Dollar against Euro and a favourable movement in respect of the US Dollar against the
Turkish Lira. The details of the foreign exchange rates used in the period can be found in Note 2 e) of the
consolidated financial statements.
Dividend
Having reviewed carefully the progress made in regard to opportunities for investment in new cruise ports
the board has proposed an interim dividend of $12.5m (19.9c per share), The interim dividend is to be paid
on 29 November to shareholders on the register on 1 November 2019. This is in keeping with the board's
state minimum dividend policy which was communicated at the time of the IPO.
Summary of the effect of the adoption of IFRS 16
H1 2019 Impact of H1 2019 Pre H1 2018
IFRS 16 IFRS 16 Reported
Reported
Income Statement
Segmental EBITDA 39.1 1.4 37.7 40.3
Adjusted EBITDA 34.8 1.5 33.3 36.1
Depreciation and (23.3) (1.2) (22.1) (22.6)
Amortisation
Net Finance Costs (18.4) (1.1) (17.4) (11.4)
Balance Sheet
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Segment Assets 656.4 58.9 597.5 606.5
Unallocated Assets 48.1 0.7 47.4 95.1
Segment 267.1 60.2 206.9 228.8
Liabilities
Unallocated 283.4 0.7 282.7 264.7
Liabilities
Gross Debt 409.9 (60.9) 349.0 354.8
Net Debt 351.1 (60.9) 290.1 253.1
Adjusted EBITDA 82.5 1.5 80.9 81.4
(annualised)
Leverage Ratios
Gross Debt/EBITDA 5.0 4.2 4.4
Net Debt/EBITDA 4.3 3.6 3.1
Global Ports Holding PLC
Interim condensed consolidated financial statements
For the six months ended 30 June 2019
Contents
Responsibility Statement 16
Independent Review Report to Global Ports Holding PLC 17
Primary Statements
Interim condensed consolidated statement of profit or loss 18-19
and other comprehensive income
Interim condensed consolidated statement of financial 20
position
Interim condensed consolidated statement of changes in 21-23
equity
Interim condensed consolidated cash flow statement 24
Notes to the condensed financial statements 25-52
Responsibility Statement
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the EU,
· the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events
that have occurred during the first six months of the financial year and their impact on the condensed
set of financial statements; and a description of the principal risks and uncertainties for the remaining
six months of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that
have taken place in the first six months of the current financial year and that have materially affected
the financial position or performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
By order of the Board,
Mehmet KUTMAN
Chairman
19 August 2019
INDEPENDENT REVIEW REPORT TO GLOBAL PORTS HOLDING PLC
Conclusion
We have been engaged by the company to review the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2019 which comprises the interim condensed consolidated
statement of profit or loss and other comprehensive income, the interim condensed consolidated statement of
financial position, the interim condensed consolidated statement of changes in equity, the interim
condensed consolidated cash flow statement and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of
financial statements in the half-yearly financial report for the six months ended 30 June 2019 is not
prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the
EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority
("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland)
2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by
the Auditing Practices Board for use in the UK. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. We read the other information contained in the half-yearly
financial report and consider whether it contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance with International Standards
on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The
directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the
UK FCA.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with
International Financial Reporting Standards as adopted by the EU. The directors are responsible for
preparing the condensed set of financial statements included in the half-yearly financial report in
accordance with IAS 34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements
in the half-yearly financial report based on our review.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our engagement to assist the
company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we
might state to the company those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the company for our review work, for this report, or for the conclusions we have reached.
John Luke
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London, E14 5GL
United Kingdom
19 August 2019
(USD '000) Notes Six months Six months Year ended
ended ended
31
30 June 2019 30 June 2018 December
2018
(Unaudited) (Unaudited)
(Audited)
Revenue 5 54,609 56,556 124,812
Cost of sales (38,593) (37,789) (77,523)
Gross profit 16,016 18,767 47,289
Other income 1,132 3,200 19,728
Selling and (1,744) (1,040) (1,293)
marketing
expenses
Administrative (7,801) (9,189) (15,993)
expenses
Other expenses (6,315) (5,224) (13,834)
Operating profit 1,288 6,514 35,897
Finance income 6 10,526 10,942 27,955
Finance costs 6 (28,963) (22,297) (60,867)
Net finance (18,437) (11,355) (32,912)
costs
Share of profit 3,320 2,730 5,631
of
equity-accounted
investees
(Loss) / Profit (13,829) (2,111) 8,616
before tax
Tax expense 7 (1,931) (1,527) (1,480)
(Loss) / Profit (15,760) (3,638) 7,136
for the period /
year
(Loss) / Profit
for the period /
year
attributable to:
Owners of the (16,317) (3,789) 770
Company
Non-controlling 557 151 6,366
interests
(15,760) (3,638) 7,136
The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under
this approach, comparative information is not restated and the cumulative effect of initially applying IFRS
16 is recognised in retained earnings at the date of initial application. See Note 2.
(USD '000) Notes Six months Six months Year ended
ended ended
31
30 June 2019 30 June 2018 December
2018
(Unaudited) (Unaudited)
(Audited)
Other
comprehensive
income
Items that will
not be
reclassified
subsequently
to profit or
loss
Remeasurement of (5) 12 (19)
defined benefit
liability
Income tax -- (3) 4
relating to
items that will
not be
reclassified
subsequently to
profit or loss
(5) 9 (15)
Items that may
be reclassified
subsequently to
profit or loss
Foreign currency 17,225 26,294 42,107
translation
differences
Cash flow hedges 77 (17) 155
- effective
portion of
changes in fair
value
Cash flow hedges (119) 53 (216)
- realized
amounts
transferred to
income statement
Losses on a (18,183) (37,342) (59,630)
hedge of a net
investment
(1,000) (11,012) (17,584)
Other (1,005) (11,003) (17,599)
comprehensive
loss for the
year, net of
income tax
Total (16,765) (14,641) (10,463)
comprehensive
loss for the
year
Total
comprehensive
loss
attributable to:
Owners of the (16,861) (11,811) (12,315)
Company
Non-controlling 96 (2,830) 1,852
interests
(16,765) (14,641) (10,463)
Basic and 12 (26.0) (6.0) 1.23
diluted (loss) /
earnings per
share
(cents per
share)
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The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under
this approach, comparative information is not restated and the cumulative effect of initially applying IFRS
16 is recognised in retained earnings at the date of initial application. See Note 2.
The notes on pages 12 to 39 are an integral part of these condensed consolidated interim financial
statements
Not As at As at As at
es
30 June 2019 31 30 June 2018
December
2018
(USD '000) (USD '000)
(USD '000)
(Unaudited) (Unaudited)
(Audited)
Non-current
assets
Property and 128,150 129,351 131,110
equipment
Intangible assets 374,759 392,361 410,036
Right of Use 2 59,658 -- --
Assets
Goodwill 13,485 13,485 13,699
Equity-accounted 26,524 26,003 23,538
investees
Other investments 15 12,617 12,013 11,782
Deferred tax 7 2,635 3,066 1,492
assets
Other non-current 4,591 4,626 4,964
assets
622,419 580,905 596,621
Current assets
Trade and other 8 42,916 19,999 16,881
receivables
Due from related 14 1,057 1,027 1,730
parties
Other investments 72 72 705
Other current 4,315 3,336 5,677
assets
Inventory 1,468 1,454 1,791
Prepaid taxes 24 1,363 722
Cash and cash 58,795 79,829 100,999
equivalents
108,647 107,080 128,505
Total assets 731,066 687,985 725,131
Current 10 58,295 48,755 48,074
liabilities
Loans and
borrowings
Trade and other 17,785 15,279 13,975
payables
Due to related 14 504 542 250
parties
Dividends payable 9 16,821 -- --
Current tax 7 2,911 2,459 2,430
liabilities
Provisions 11 1,974 955 1,156
98,290 67,990 65,885
Non-current
liabilities
Loans and 10 351,654 298,296 306,747
borrowings
Other financial 2,088 3,408 2,551
liabilities
Derivative 15 669 617 788
financial
liabilities
Deferred tax 7 89,582 92,294 96,304
liabilities
Provisions 11 7,388 8,862 20,316
Employee benefits 836 797 837
452,217 404,274 427,543
Total liabilities 550,507 472,264 493,428
Net assets 180,559 215,721 231,703
Equity
Share capital 811 811 811
Legal reserves 13,038 13,030 13,030
Share based 275 -- --
payment reserves
Hedging reserves (213,618) (195,393) (173,069)
Translation 214,918 197,247 179,901
reserves
Retained earnings 75,845 108,981 121,628
Equity 91,269 124,676 142,301
attributable to
equity holders of
the Company
Non-controlling 89,290 91,045 89,402
interests
Total equity 180,559 215,721 231,703
The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under
this approach, comparative information is not restated and the cumulative effect of initially applying IFRS
16 is recognised in retained earnings at the date of initial application. See Note 2.
The notes on pages 12 to 39 are an integral part of these condensed consolidated interim financial
statements
(USD '000) Notes Legal Share Hedging Translation Retained Non-controlling
based reserve reserves earnings interests
payme s
nt
Share reserves reser
capit ves
al
Total Total
equity
Balance at 1 811 13,030 -- (195,39 197,247 108,981 124,6 91,045 215,72
January 2019 3) 76 1
(Audited)
Adjustment -- -- -- -- -- -- -- -- --
on initial
application
of IFRS 16
(net of tax)
(*)
Adjusted 811 13,030 -- (195,39 197,247 108,981 124,6 91,045 215,72
balance at 1 3) 76 1
January 2019
Loss for the -- -- -- -- -- (16,317) (16,3 557 (15,76
year 17) 0)
Other -- -- -- (18,225 17,671 10 (544) (461) (1,005
comprehensiv ) )
e (loss) /
income for
the year
Total -- -- -- (18,225 17,671 (16,307) (16,8 96 (16,76
comprehensiv ) 61) 5)
e (loss) /
income for
the year
Transactions
with owners
of the
Company
Transactions -- -- -- -- -- -- -- -- --
with
non-controll
ing interest
Transfer to -- 8 -- -- -- (8) -- -- --
legal
reserves
Equity -- -- 275 -- -- -- 275 -- 275
settled
share-based
payment
expenses
Dividends 9 -- -- -- -- -- (16,821) (16,8 (1,851) (18,67
21) 2)
Total -- 8 275 -- -- (16,829) (16,5 (1,851) (18,39
contribution 46) 7)
s and
distribution
s
Total -- 8 275 (18,225 17,671 (33,136) (33,4 (1,755) (35,16
transactions ) 07) 2)
with owners
of the
Company
Balance at 811 13,038 275 (213,61 214,918 75,845 91,26 89,290 180,55
30 June 2019 8) 9 9
(Unaudited)
(*) The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective approach.
Under this approach, comparative information is not restated and the cumulative effect of initially
applying IFRS 16 is recognized in retained earnings at the date of initial application. See Note 2.
The notes on pages 12 to 39 are an integral part of these condensed consolidated interim financial
statements
(USD '000) Notes Legal Hedging Translation Retained Non-controlling
reserve reserves earnings interests
s
Share reserves
capit
al
Total Total
equity
Balance at 1 811 13,012 (135,76 150,626 143,148 171,8 92,896 264,73
January 2018 3) 34 0
(Audited)
Loss for the -- -- -- -- (3,789) (3,78 151 (3,638
year 9) )
Other -- -- (37,306 29,275 9 (8,02 (2,981) (11,00
comprehensiv ) 2) 3)
e (loss) /
income for
the year
Total -- -- (37,306 29,275 (3,780) (11,8 (2,830) (14,64
comprehensiv ) 11) 1)
e (loss) /
income for
the year
Transactions
with owners
of the
Company
Transactions -- -- -- -- -- -- -- --
with
non-controll
ing interest
Transfer to -- 18 -- -- (18) -- -- --
legal
reserves
Dividends 9 -- -- -- -- (17,722) (17,7 (664) (18,38
22) 6)
Total -- 18 -- -- (17,740) (17,7 (664) (18,38
contribution 22) 6)
s and
distribution
s
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Total -- 18 (37,306 29,275 (21,520) (29,5 (3,494) (33,02
transactions ) 33) 7)
with owners
of the
Company
Balance at 811 13,030 (173,06 179,901 121,628 142,3 89,402 231,70
30 June 2018 9) 01 3
(Unaudited)
The notes on pages 12 to 39 are an integral part of these condensed consolidated interim financial
statements
(USD '000) Notes Legal Hedging Translation Retained Non-controlling
reserve reserves earnings interests
s
Share reserves
capit
al
Total Total
equity
Balance at 1 811 13,012 (135,76 150,626 143,148 171,8 92,896 264,73
January 2018 3) 34 0
(Audited)
(Loss) / -- -- -- -- 770 770 6,366 7,136
income for
the year
Other -- -- (59,630 46,621 (76) (13,0 (4,514) (17,59
comprehensiv ) 85) 9)
e (loss) /
income for
the year
Total -- -- (59,630 46,621 694 (12,3 1,852 (10,46
comprehensiv ) 15) 3)
e (loss) /
income for
the year
Transactions
with owners
of the
Company
Transactions -- -- -- -- -- -- 94 94
with
non-controll
ing interest
Transfer to -- 18 -- -- (18) -- -- --
legal
reserves
Dividends 9 -- -- -- -- (34,843) (34,8 (3,797) (38,64
43) 0)
Total -- 18 -- -- (34,861) (34,8 (3,703) (38,54
contribution 43) 6)
s and
distribution
s
Total -- 18 (59,630 46,621 (34,167) (47,1 (1,851) (49,00
transactions ) 58) 9)
with owners
of the
Company
Balance at 811 13,030 (195,39 197,247 108,981 124,6 91,045 215,72
31 December 3) 76 1
2018
(Audited)
The notes on pages 12 to 39 are an integral part of these condensed consolidated interim financial
statements
Notes Six months Six months Year
ended 30 ended 30 ended 31
June 2019 June 2018 December
2018
(USD '000) (USD '000)
(USD
'000)
(Unaudited) (Unaudited)
(Audited)
Cash flows from
operating
activities
Loss for the (15,760) (3,638) 7,136
period / year
Adjustments
for:
Depreciation of 23,302 22,586 44,668
PPE and RoU
assets and
amortization
expense
Share of profit (3,320) (2,730) (5,631)
of
equity-accounte
d investees,
net of tax
Gain on (17) (12) (142)
disposal of
property plant
and equipment
Finance costs 6 15,016 12,866 26,623
(excluding
foreign
exchange
differences)
Finance income 6 (871) (1,014) (1,684)
(excluding
foreign
exchange
differences)
Foreign 6 4,294 (497) 7,973
exchange
differences on
finance costs
and income, net
Income tax 7 1,931 1,524 1,480
expense
Employment 72 99 39
termination
indemnity
reserve
Equity settled 275 -- --
share-based
payment
expenses
(Charges to) / 1,316 148 (12,000)
reversal of
provision
Operating cash 26,238 29,332 68,462
flow before
changes in
operating
assets and
liabilities
Changes in:
- trade and (22,917) (1,027) (4,297)
other
receivables
- other current 426 1,404 3,510
assets
- related party (30) -- 572
receivables
- other 128 57 412
non-current
assets
- trade and (79) (2,064) (71)
other payables
- related party (38) (187) 59
payables
- provisions (1,821) (244) (64)
Post-employment (21) (58) (131)
benefits paid
Cash generated by operations 1,886 27,213 68,452
before benefit and tax
payments
Income taxes (3,137) (2,737) (7,345)
paid
Net cash (1,251) 24,476 61,107
generated from
operating
activities
Investing
activities
Acquisition of (5,589) (5,431) (11,896)
property and
equipment
Acquisition of (69) (151) (2,911)
intangible
assets
Proceeds from 22 11 234
sale of
property and
equipment
Bond and -- -- (30)
short-term
investment
income
Proceeds from -- 13,822 13,944
sale of
investments
Bank interest 140 840 348
received
Dividends from 2,849 -- 541
equity
accounted
investees
Other -- (11,782) (11,977)
investment in
FVTPL
instruments
Advances given (172) (152) (85)
for tangible
assets
Net cash used (2,819) (2,843) (11,832)
in investing
activities
Financing
activities
Equity -- -- 94
injection by
minorities to
subsidiaries
Cash inflow -- (159) --
from related
parties
Cash outflow to -- 20 --
related parties
Dividends paid 9 -- (17,722) (34,843)
to equity
owners
Dividends paid 9 (538) -- (3,797)
to NCIs
Interest paid (12,574) (11,666) (23,902)
Proceeds from 19,250 34,770 44,205
borrowings
Repayments of (13,224) (23,929) (34,697)
borrowings
Repayments of (2,433) (809) (1,427)
lese
liabilities
(2018: payment
of finance
lease
liabilities)
(*)
Net cash used (9,519) (19,495) (54,367)
in financing
activities
Net (decrease) (13,589) 2,138 (5,092)
/ increase in
cash and cash
equivalents
Effect of (7,445) (587) (14,527)
foreign
exchange rate
changes on cash
and cash
equivalents
Cash and cash 79,829 99,448 99,448
equivalents at
beginning of
year
Cash and cash 58,795 100,999 79,829
equivalents at
end of year
(*) The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective approach.
Under this approach, comparative information is not restated and the cumulative effect of initially
applying IFRS 16 is recognised in retained earnings at the date of initial application. See Note 2.
The notes on pages 12 to 39 are an integral part of these condensed consolidated interim financial
statements
1) General information
Global Ports Holding PLC is a public limited company listed on the London Stock Exchange, and incorporated
in the United Kingdom and registered in England and Wales under the Companies Act 2006. The address of the
registered office is 34 Brook Street 3rd Floor, London, England, W1K 5DN, United Kingdom. Global Ports
Holding PLC is the ultimate holding company of Global Liman Isletmeleri A.S. and its subsidiaries (the
"Group").
These unaudited condensed interim consolidated financial statements of Global Ports Holding PLC (the
"Company", and together with its subsidiaries, the "Group") for the six months ended 30 June 2019 were
authorised for issue in accordance with a resolution of the directors on 19 August 2019.
2) Accounting policies
a) Basis of preparation
This condensed set of consolidated financial statements included in this half-yearly financial report has
been prepared in accordance with the International Accounting Standard 34 'Interim Financial Reporting', as
adopted by the European Union and the requirements of the Disclosure and Transparency Rules ("DTR") of the
FCA in the United Kingdom as applicable to interim financial reporting.
The interim condensed financial statements represent a 'condensed set of financial statements' as referred
to in the DTR issued by the FCA. The interim condensed consolidated financial statements do not include all
the information and disclosures required in the annual financial statements and should be read in
conjunction with the consolidated financial statements as at and for the year ended 31 December 2018
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available on the Company website. Also, selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the changes in the Group's financial position and
performance since the last annual financial statements.
The financial information contained in this report for the six months ended 30 June 2018 and 30 June 2019
is unaudited. The interim condensed consolidated income statement and other comprehensive income, the
condensed consolidated statement of financial position, the condensed consolidated statement of changes in
equity, and the condensed consolidated statement of cash flows for the six months ended 30 June 2019 have
been reviewed by the auditor. These interim financial statements were authorised for issue by the Company's
board of directors on 19 August 2019.
The comparative figures for the financial year ended 31 December 2018 are not the company's statutory
accounts for that financial year. Those accounts have been reported on by the company's auditor and
delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
b) Going concern
The Group operates 14 ports in 8 different countries and is focusing on increasing its number of Ports in
different geographical locations to support its operations and diversify economic and political risks. As a
consequence, the directors believe that the Group is well placed to manage its business risks successfully
despite the current uncertain economic outlook.
The directors have a reasonable expectation that the Group and its subsidiaries have adequate resources to
continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing the condensed consolidated financial statements.
The Company is not expecting any significant impact on its operations from the UK decision to leave
European Union.
The adoption of IFRS 16 does not impact the ability of the Group to comply with its Gross debt to EBITDA
covenant. Details described on Note 10.
2 Accounting Policies (continued)
c) Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, the directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions used on the preparation of these interim financial statements are
same as those used in the Group's consolidated financial statements as at and for the year ended 31
December 2018, except for the new significant judgements related to lessee accounting under IFRS 16, which
are described in Note 2(d)(i).
d) Change in / new accounting policies
Except as described below, the accounting policies applied in these interim financial statements are the
same as those applied in the Group's consolidated financial statements as at and for the year ended 31
December 2018. The changes in accounting policies are also expected to be reflected in the Group's
consolidated financial statements as at and for the year ending 31 December 2019.
i) IFRS 16
The Group has initially adopted IFRS 16 Leases from 1 January 2019.
IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as a
lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease
liabilities representing its obligation to make lease payments. Lessor accounting remains similar to
previous accounting policies.
The Group has applied IFRS 16 using the modified retrospective approach, under which the cumulative effect
of initial application is recognised in retained earnings at 1 January 2019. Accordingly, the comparative
information presented for 2018 has not been restated - i.e. it is presented, as previously reported, under
IAS 17 and related interpretations. The details of the changes in accounting policies are disclosed below.
Definition of a lease
Previously, the Group determined at contract inception whether an arrangement was or contained a lease
under IFRIC 4 Determining Whether an Arrangement contains a Lease. The Group now assesses whether a
contract is or contains a lease based on the new definition of a lease. Under IFRS 16, a contract is, or
contains, a lease if the contract conveys a right to control the use of an identified asset for a period of
time in exchange for consideration.
On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment
of which transactions are leases. It applied IFRS 16 only to contracts that were previously identified as
leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed.
Therefore, the definition of a lease under IFRS 16 has been applied only to contracts entered into or
changed on or after 1 January 2019.
As a lessee
The Group leases a variety of assets, principally land, building and cars.
As a lessee, the Group previously classified leases as operating or finance leases based on its assessment
of whether the lease transferred substantially all of the risks and rewards of ownership. Under IFRS 16,
the Group recognises right-of-use assets and lease liabilities for most leases - i.e. these leases are
on-balance sheet.
However, the Group has elected not to recognise right-of-use assets and lease liabilities for short term
leases (e.g. car rentals). The Group recognises the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
2 Accounting Policies (continued)
d) Change in / new accounting policies (continued)
i. IFRS 16 (continued)
The Group presents right-of-use assets are presented as a line item on the face of financials. The carrying
amounts of right-of-use assets are as below.
In thousands of USD Right of Use
Balance at 1 January 2019 61,233
Balance at 30 June 2019 59,658
The Group presents lease liabilities in loans and borrowings in the statement of financial position.
Significant accounting policies
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated
depreciation and impairment losses and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental
borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by
lease payment made. It is remeasured when there is a change in future lease payments arising from a change
in an index or rate, a change in the estimate of the amount expected to be payable under a residual value
guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is
reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a
lessee that include renewal options. The assessment of whether the Group is reasonably certain to exercise
such options impacts the lease term, which significantly affects the amount of lease liabilities and
right-of-use assets recognised.
Impacts on transition
On transition to IFRS 16, the Group recognised right-of-use assets and additional lease liabilities. For
the annual year starting at 1 January 2019, the Right-of-use assets have been measured at an amount equal
to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. The impact on
transition is summarized below.
In thousands of USD 1 January 2019
Right of use assets 61,233
Lease liabilities 62,328
Prepayments 328
Accruals (1,423)
2 Accounting Policies (continued)
d) Change in / new accounting policies (continued)
i. IFRS 16 (continued)
When measuring lease liabilities for leases that were classified as operating leases, the Group discounted
lease payments using its incremental borrowing rate at 1 January 2019. The weighted- average rate applied
is 3.4%.
In thousands of USD 1 January 2019
Operating lease commitment at 31 December 2018 158,860
as disclosed in the Group's consolidated
financial statements
Discounted using the incremental borrowing rate 61,268
at 1 January 2019
Finance lease liabilities recognised as at 31 1,905
December 2018
(35)
· Recognition exemption for short-term leases
Lease liabilities recognised at 1 January 2019 63,138
Transition
Previously, the Group classified property leases as operating leases under IAS 17. These include land and
buildings. The leases run for the period of the signed concession agreement. Some concession agreements
include clauses and regulations to renew the lease for an additional period after the end of the
non-cancellable period.
Some leases provide for additional rent payments that are based on changes in local price indices.
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At transition, for leases classified as operating leases under IAS 17, lease liabilities were measured at
the present value of the remaining lease payments, discounted at the Group's incremental borrowing rate as
at 1 January 2019. Right-of-use assets are measured at an amount equal to the lease liability, adjusted by
the amount of any prepaid or accrued lease payments - the Group applied this approach to leases.
The Group used the following practical expedients when applying IFRS 16 to leases previously classified as
operating leases under IAS 17.
· Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12
months of lease term.
· Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
· Used current lease term either the contract contains options to extend or terminate the lease.
As a lessor
The accounting policies applicable to the Group as a lessor are not different from those under IAS 17. The
Group is not required to make any adjustments on transition to IFRS 16 for leases in which it acts as a
lessor. However, the Group has applied IFRS 15 Revenue from Contracts with Customers to allocate
consideration in the contract to each lease and non-lease component.
2 Accounting Policies (continued)
d) Change in / new accounting policies (continued)
i. IFRS 16 (continued)
Impacts for the period
As a result of initially applying IFRS 16, in relation to the leases that were previously classified as
operating leases, the Group recognised USD 59,658 thousand of right-of-use assets and USD 60,946 thousand
of lease liabilities as at 30 June 2019.
Also in relation to those leases under IFRS 16, the Group has recognised depreciation and interest costs,
instead of port rent and operating lease expenses. During the six months ended 30 June 2019, the Group
recognised USD 1,162 thousand of depreciation charges and USD 1,063 thousand of interest costs from these
leases.
For the impact of IFRS 16 on segment information and EBITDA, see Note 3.
The Group presents lease liabilities in 'loans and borrowings' in the statement of financial position. The
adoption of IFRS 16 does not impact the ability of the Group to comply with its Gross debt to EBITDA
covenant. Details described on Note 10.
ii) IFRS 2
On 1 January 2019, the Group established share option program that entitles key management personnel to
receive shares in the Company based on the performance of the Company during the vesting period. Under this
program, holders of vested option are entitled to receive shares of the Company at the grant date.
Currently, this program is limited to key management personnel and other senior employees.
The option will be settled by physical delivery of shares.
On 1 January 2019, the Group granted 204,000 Restricted Stock Units (RSUs) to employees that entitle them
to a share payment after three years of service. The RSUs will be granted at the end of three-year vesting
period and paid after two year holding period. Shares issued under the LTIP are subject to a dilution limit
of up to 3% over 10 years, which will be monitored by the Committee. Upon vesting of an RSU, Employees must
pay the par value in respect of each share that vests. Employees are also responsible to declare and pay
the tax related to gains from RSUs to the authorities.
The grant-date fair value of equity-settled share-based payment arrangements granted to employees is
generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the
awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the
related service and non-market performance conditions are expected to be met, such that the amount
ultimately recognised is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date.
iii) Other standards
The IASB issued Annual Improvements as at 15 March 2019. The amendments are effective after annual period
started as of 1 January 2019.
The following standards are effective:
· Annual Improvements to IFRS Standards 2015-2017 Cycle (issued on 12 December 2017)
· Amendments to IAS 19: Plan Amendment, Curtailment or Settlement (issued on 7 February 2018)
· Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures (issued on 12 October 2017)
· IFRIC 23 Uncertainty over Income Tax Treatments (issued on 7 June 2017)
· Amendments to IFRS 9: Prepayment Features with Negative Compensation (issued on 12 October 2017)
Earlier application is permitted.
2 Accounting Policies (continued)
d) Change in / new accounting policies (continued)
iv) Standards issued but not yet effective
The following standards are in issue but not yet adopted by the Group:
· Amendments to References to Conceptual Framework in IFRS Standards, effective from 1 January 2020
· IFRS 3 Definition of a Business, effective from 1 January 2020
· IAS1 and IAS8, Definition of Material, effective from 1 January 2020
· IFRS 17 Insurance contracts, effective from 1 January 2021
The Group is currently evaluating the impact of adopting these new accounting standards. Management is
expecting the adoption of the amendments has had no major impact on the Group's consolidated financial
position or performance of the Group. Further analysis will be included on the consolidated financial
statements as at and for the year ended 31 December 2019.
e) Foreign currency
Transactions in foreign currencies are translated into the respective functional currencies of the Group
entities by using the exchange rate at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are retranslated to the functional currency at the
exchange rate at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies
carried at historical cost should be retranslated using the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in profit or loss.
The Group entities use United Stated Dollars ("USD"), Euro or Turkish Lira ("TL") as their functional
currencies since these currencies represent the primary economic environment in which they operate. These
currencies are used to a significant extent in, or have a significant impact on, the operations of the
related Group entities and reflect the economic substance of the underlying events and circumstances
relevant to these entities. Transactions and balances not already measured in the functional currency have
been re-measured to the related functional currencies in accordance with the relevant provisions of IAS 21
The Effect of Changes in Foreign Exchange Rates.
For the purpose of the interim condensed consolidated financial statements, US Dollars has been chosen as
the presentation currency by management to facilitate the investors' ability to evaluate the Group's
performance and financial position in relation to similar companies domiciled in different jurisdictions,
and to eliminate the depreciating effect of TL against hard currencies, considering all subsidiaries of the
Company are earning revenues in hard currencies.
Assets and liabilities of those Group entities with a different functional currency than the presentation
currency of the Group are translated into the presentation currency of the Group at the rate of exchange
ruling at the reporting date. The income and expenses of the Group entities are translated into the
presentation currency at the average exchange rates for the period. Equity items, except for net income,
are translated using their historical costs. These foreign currency differences are recognised in "other
comprehensive income" ("OCI"), within equity under "translation reserves".
Below are the foreign exchange rates used by the Group for the periods shown.
As at 30 June 2019, 31 December 2018 and 30 June 2018, foreign currency exchange rates of the Central Bank
of the Turkish Republic were as follows:
30 June 2019 31 December 2018 30 June 2018
TL/USD 0.1738 0.1901 0.2193
Euro/USD 1.1382 1.1458 1.1641
2 Accounting Policies (continued)
e) Foreign currency (continued)
For the six months ended 30 June 2019, 30 June 2018 and for the year ended 31 December 2018, average
foreign currency exchange rates of the Central Bank of the Turkish Republic were as follows:
Six months ended Six months ended Year ended 31
30 June 2019 30 June 2018 December 2018
TL/USD 0.1783 0.2450 0.2078
Euro/USD 1.1297 1.2093 1.1764
f) Alternative performance measures
This interim condensed set of financial statements includes certain measures to assess the financial
performance of the Group's business that are termed "non-IFRS measures" because they exclude amounts that
are included in, or include amounts that are excluded from, the most directly comparable measure calculated
and presented in accordance with IFRS, or are calculated using financial measures that are not calculated
in accordance with IFRS. In order to account for the impact of IFRS 16, which is applied in the Group
financials using the modified retrospective approach, comparative information is not restated, and the
impact has been presented as a separate reconciling item on computations. These non-GAAP measures comprise
the following.
Segmental EBITDA
Segmental EBITDA calculated as income/(loss) before tax after adding back: interest; depreciation;
amortisation; unallocated expenses; and specific adjusting items.
Management evaluates segmental performance based on Segmental EBITDA. This is done to reflect the fact that
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DJ Global Ports Holding PLC: Interim Results -11-
there is a variety of financing structures in place both at a port and Group-level, and the nature of the
port operating right intangible assets vary by port depending on which concessions were acquired versus
awarded, and which fall to be treated under IFRIC 12. As such, management considers monitoring performance
in this way, using Segmental EBITDA, gives a more comparable basis for profitability between the portfolio
of ports and a metric closer to net cash generation. Excluding project costs for acquisitions and one-off
transactions such as unallocated expenses, gives a more comparable year-on-year measure of port-level
trading performance.
Management uses Segmental EBITDA to evaluate each port and group-level performances on operational level.
Specific adjusting items
The Group presents specific adjusting items separately. For proper evaluation of individual ports financial
performance and consolidated financial statements, Management considers disclosing specific adjusting items
separately because of their size and nature. These expenses and incomes include project expenses; being the
costs of specific M&A activities and the costs associated with appraising and securing new and potential
future port agreements, employee termination expenses, income from insurance repayments, replacement
provisions and other provision expenses and other expenses including donations, membership fees and special
consumption taxes.
Specific adjusting items comprised as following,
Six months ended Six months ended Year ended
30 June 2019 30 June 2018 31 December
2018
(USD '000) (USD '000)
(USD '000)
(Unaudited) (Unaudited)
(Audited)
Project 4,683 3,646 9,594
expenses
Employee 419 112 147
termination
expenses
Replacement 256 -- 677
provisions
Provisions / 997 306 (12,210)
(reversal of
provisions)
Other 510 175 (690)
expenses
Specific 6,865 4,239 (2,482)
adjusting
items
2 Accounting Policies (continued)
f) Alternative performance measures (continued)
Adjusted EBITDA
Adjusted EBITDA calculated as Segmental EBITDA less unallocated (holding company) expenses.
Management uses an Adjusted EBITDA measure to evaluate Group's consolidated performance on an "as-is" basis
with respect to the existing portfolio of ports. Notably excluded from Adjusted EBITDA, the costs of
specific M&A activities and the costs associated with appraising and securing new and potential future port
agreements. M&A and project development are key elements of the Group's strategy in the Cruise segment.
Project lead times and upfront expenses for projects can be significant, however these expenses (as well as
expenses related to raising financing such as acquisition financing) do not relate to the current portfolio
of ports but to future EBITDA potential. Accordingly, these expenses would distort Adjusted EBITDA which
management is using to monitor the existing portfolio's performance.
A full reconciliation for Segmental EBITDA and Adjusted EBITDA to profit before tax is provided in the
Segment Reporting Note 3 to these financial statements.
Underlying Profit
Management uses this measure to evaluate the profitability of the Group normalised to exclude the specific
non-recurring expenses and income, and adjusted for the non-cash port intangibles amortisation charge,
giving a measure closer to actual net cash generation, which the directors' consider a key benchmark in
making the dividend decision. Underlying Profit is also consistent with Consolidated Net Income (CNI), as
defined in the Group's 2021 Eurobond, which is monitored to ensure covenant compliance.
Underlying Profit is calculated as profit/(loss) for the year after adding back: amortization expense in
relation to Port Operation Rights, depreciation expense in relation to Right-of-use assets and specific
non-recurring expenses and income.
Adjusted earnings per share
Adjusted earnings per share is calculated as underlying profit divided by weighted average per share.
Management uses these measures to evaluate the profitability of the Group normalised to exclude the
specific non-recurring expenses and income and adjusted for the non-cash port intangibles amortisation
charge, giving a measure closer to actual net cash generation, which the directors' consider a key
benchmark in making the dividend decision.
Underlying profit and adjusted earnings per share computed as following;
Six months ended Six months ended Year ended
30 June 2019 30 June 2018 31
December
2018
(USD '000) (USD '000)
(USD '000)
(Unaudited) (Unaudited)
(Audited)
(Loss) / (15,267) (3,638) 7,136
Profit for
the Period
Impact of (493) -- --
IFRS 16
(Loss) / (15,760) (3,638) 7,136
Profit for
the Period
Amortisation 15,543 16,045 31,648
of port
operating
rights
Depreciation 1,162 -- --
of
right-of-use
assets
Reversal of -- -- (12,209)
replacement
provisions
Underlying 945 12,407 26,575
Profit
Weighted 62,826,963 62,826,963 62,826,963
average
number of
shares
Adjusted 1.5 19.7 42.3
earnings per
share (pence)
2 Accounting Policies (continued)
f) Alternative performance measures (continued)
Net debt
Net debt comprises total borrowings (bank loans, Eurobond and finance leases net of accrued tax) less cash,
cash equivalents and short term investments.
Management includes short term investments into the definition of Net Debt, because these short term
investment are comprised of marketable securities which can be quickly converted into cash.
Net debt comprised as following;
Six months ended Six months ended Year ended
30 June 2019 30 June 2018 31 December
2018
(USD '000) (USD '000)
(USD '000)
(Unaudited) (Unaudited)
(Audited)
Current loans 58,295 48,074 48,755
and
borrowings
Non-current 351,654 306,747 298,296
loans and
borrowings
Lease (60,945) -- --
liabilities
recognized
due to IFRS
16
application
Gross debt 349,004 354,821 347,051
Cash and bank (58,795) (100,999) (79,829)
balances
Short term (72) (705) (72)
financial
investments
Net debt 290,137 253,117 267,150
Equity 180,559 231,703 215,721
Net debt to 1.61 1.09 1.24
Equity ratio
Leverage ratio
Leverage ratio is used by management to monitor available credit capacity of the Group.
Leverage ratio is computed by dividing gross debt to Adjusted EBITDA.
Leverage ratio computation is made as follows;
Six months ended Six months ended Year ended
30 June 2019 30 June 2018 31 December
2018
(USD '000) (USD '000)
(USD '000)
(Unaudited) (Unaudited)
(Audited)
Gross debt 409,949 354,822 347,051
Lease (60,945) -- --
liabilities
recognised
due to IFRS
16
application
Gross debt, 349,004 354,822 347,051
net of IFRS
16 impact
Adjusted 80,903 81,401 83,714
EBITDA
(annualized
)
Impact of 1,542 -- --
IFRS 16 on
EBITDA
Adjusted 82,445 81,401 83,714
EBITDA
(annualized
)
Leverage 4.23x 4.36x 4.15x
ratio
CAPEX
CAPEX represents the recurring level of capital expenditure required by the Group excluding M&A related
capital expenditure.
CAPEX computed as 'Acquisition of property and equipment' and 'Acquisition of intangible assets' per the
cash flow statement.
Six months ended Six months ended Year ended
30 June 2019 30 June 2018 31 December
2018
(USD '000) (USD '000)
(USD '000)
(Unaudited) (Unaudited)
(Audited)
Acquisition 5,589 5,431 11,896
of property
and equipment
Acquisition 69 151 2,911
of intangible
assets
CAPEX 5,658 5,582 14,807
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DJ Global Ports Holding PLC: Interim Results -12-
2 Accounting Policies (continued)
f) Alternative performance measures (continued)
Cash conversion ratio
Cash conversion ratio represents a measure of cash generation after taking account of on-going capital
expenditure required to maintain the existing portfolio of ports.
It is computed as Adjusted EBITDA less CAPEX divided by Adjusted EBITDA.
Six months ended Six months ended Year ended
30 June 2019 30 June 2018 31 December
2018
(USD '000) (USD '000)
(USD '000)
(Unaudited) (Unaudited)
(Audited)
Adjusted 80,903 81,401 83,714
EBITDA
(annualized
)
Impact of 1,542 -- --
IFRS 16 on
EBITDA
Adjusted 82,445 81,401 83,714
EBITDA, net
of IFRS 16
impact
CAPEX (5,658) (5,582) (14,912)
Cash 76,787 75,819 68,802
converted
after CAPEX
Cash 93.1% 93.1% 82.2%
conversion
ratio
Hard currency
Management uses the term hard currency to refer to those currencies that historically have been less
susceptible to exchange rate volatility. For the period ended 30 June 2019 and 2018, and for the year ended
31 December 2018, the relevant hard currencies for the Group are US Dollar, Euro and Singaporean Dollar.
3) Segment reporting
a) Products and services from which reportable segments derive their revenues
The Group operates various cruise and commercial ports and all revenue is generated from external customers
such as cruise liners, ferries, yachts, individual passengers, container ships and bulk and general cargo
ships.
b) Reportable segments
Operating segments are defined as components of an enterprise for which discrete financial information is
available, that is evaluated regularly by the chief operating decision-maker, in deciding how to allocate
resources and assessing performance.
The Group has identified ports in each country with same operations as an operating segment, separately, as
each country represents a set of activities which generates revenue and the financial information of ports
are reviewed by the Group's chief operating decision-maker in deciding how to allocate resources and assess
performance. The Group's chief operating decision-maker is the Chief Executive Officer ("CEO"), who reviews
the management reports of each port at least on a monthly basis.
The CEO evaluates segmental performance on the basis of earnings before interest, tax, depreciation and
amortisation ("EBITDA") excluding the effects of specific adjusting income and expenses comprising project
expenses, bargain purchase gains and reserves, board member leaving fees, employee termination payments,
unallocated expenses, finance income, finance costs, and including the share of equity-accounted investees
which is fully integrated into the GPH cruise port network ("Adjusted EBITDA" or "Segmental EBITDA").
Adjusted EBITDA is considered by Group management to be the most appropriate profit measure for the review
of the segment operations because it excludes items which the Company does not consider to represent the
operating cash flows generated by underlying business performance. The share of equity-accounted investees
has been included as it is considered to represent operating cash flows generated by the Group's operations
that are structured in this manner.
3 Segment reporting (continued)
The Group has the following operating segments under IFRS 8:
· Barcelona Port Investments SL ("BPI"), Valletta Cruise Port Plc ("VCP"), Ege Liman Isletmeleri A.S.
("Ege Liman"), Bodrum Liman Isletmeleri A.S. ("Bodrum Liman"), Ortadogu Antalya Liman Isletmeleri A.S.
("Ortadogu" or "Akdeniz"), Port Operation Holding Srl ("POH"), Lisbon Cruise Terminals LDA ("Port of
Lisbon" or "LCT"), SATS - Creuers Cruise Services Pte. Ltd. ("Singapore Cruise Port"), Venezia
Investimenti Srl. ("Venice Investment" or "Venice Cruise Port") and La Spezia Cruise Facility Srl. ("La
Spezia") which fall under the Group's cruise port operations.
· Ortadogu (Commercial port operations) and Port of Container Terminal and General Cargo ("Port of Adria"
or "Port of Bar") which both fall under the Group's commercial port operations.
The Group's reportable segments under IFRS 8 are BPI, VCP, Ege Liman, Ortadogu Liman (Commercial port
operations) and Port of Adria. Segments that do not exceed the quantitative thresholds for reporting
information about operating segments have been included in Other.
Global Depolama does not generate any revenues and therefore is presented as unallocated to reconcile to
the consolidated financial statements results.
Assets, revenue and expenses directly attributable to segments are reported under each reportable segment.
The basis of segmentation and the basis of measurement of the segment profit or loss has not changed from
the latest annual financial statements.
Any items which are not attributable to segments have been disclosed as unallocated.
The Group has initially applied IFRS 16 at 1 January 2019, using the modified retrospective approach. Under
this approach, comparative information is not restated (see Note 2). In order to account for the
application of IFRS 16, management has presented as separate reconciling items the impact of IFRS 16 on
segmental and adjusted EBITDA, segment assets, segment liabilities, depreciation, finance costs.
As a result, the Group recognised USD 59,658 thousand of right-of-use assets and USD 60,946 thousand of
liabilities from those lease contracts. The assets and liabilities are included in BPI, VCP, Other Cruise
Ports, Ortadogu Liman and Port of Adria segments as at 30 June 2019. The Group recognises depreciation and
interest costs, instead of operating lease expense (see Note 2d). During the six months ended 30 June 2019,
in relation to those leases, the Group recognised USD 1,162 thousand of depreciation charges and USD 1,063
thousand of additional interest costs from leases.
3 Segment reporting (continued)
b) Reportable segments (continued)
i) Segment revenues, results and reconciliation to profit before tax
The following is an analysis of the Group's revenue, results and reconciliation to profit before tax by
reportable segment:
BPI VCP Ege Other Total Ortadogu Port Total Total
Lim Cruis Cruis Liman of Comme Conso
an e e Adri rcial lidat
Ports a ed
USD '000
Six months
ended 30 June
2019
(Unaudited)
Revenue 12, 6,2 2,2 2,809 23,85 26,277 4,47 30,75 54,60
500 49 99 7 5 2 9
Segmental 7,7 3,7 1,3 4,027 16,82 20,690 1,56 22,25 39,08
EBITDA 19 21 58 5 8 8 3
7,1 3,4 1,3 3,757 15,64 20,656 1,35 22,00 37,65
06 25 58 6 2 8 4
· Segmental
EBITDA pre
IFRS 16
613 296 -- 270 1,179 34 216 250 1,429
· IFRS 16
impact on
Segmental
EBITDA
Unallocated (4,28
expenses 3)
Adjusted 34,80
EBITDA 0
114
· IFRS 16
impact on
Adjusted
EBITDA
Reconciliation
to profit
before tax
Depreciation (23,3
and 02)
amortisation
expenses
(1,16
2)
· IFRS 16
impact on
depreciation
and
amortization
expenses
Specific (6,89
adjusting 0)
items*
Finance income 10,52
6
Finance costs (28,9
63)
(1,06
3)
· IFRS 16
impact on
finance
costs
(Loss) / (13,8
profit before 29)
income tax
Six months
ended 30 June
2018
(Unaudited)
Revenue 13, 5,6 1,7 1,627 22,38 27,997 6,17 34,16 56,55
348 76 36 7 2 9 6
Segmental 8,0 2,5 946 3,214 14,72 23,145 2,46 25,60 40,32
EBITDA 17 44 1 0 5 6
Unallocated (4,25
expenses 7)
Adjusted 36,06
EBITDA 9
Reconciliation
to profit
before tax
Depreciation (22,5
and 86)
amortisation
expenses
Specific (4,23
adjusting 9)
items*
Finance income 10,94
2
Finance costs (22,2
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DJ Global Ports Holding PLC: Interim Results -13-
97)
(Loss) / (2,11
profit before 1)
income tax
Year ended 31
December 2018
(Audited)
Revenue 31, 13, 4,6 5,670 54,91 59,887 10,0 69,89 124,8
577 017 50 4 11 8 12
Segmental 19, 6,3 3,0 8,331 37,60 49,184 3,92 53,11 90,71
EBITDA 793 99 84 7 8 2 9
Unallocated (7,00
expenses 5)
Adjusted 83,71
EBITDA 4
Reconciliation
to profit
before tax
Depreciation (44,6
and 68)
amortisation
expenses
Specific 2,482
adjusting
items*
Finance income 27,95
5
Finance costs (60,8
67)
(Loss) / 8,616
profit before
income tax
* Please refer to Note 2 (f) for alternative performance measures (APM) on pages 16 to 19.
3 Segment reporting (continued)
b) Reportable segments (continued)
The Group did not have inter-segment revenues in any of the periods shown above.
ii) Segment assets and liabilities
The following is an analysis of the Group's assets and liabilities by reportable segment:
BPI VCP Ege Other Total Ortadogu Port Total Total
Lim Cruis Cruis Liman of Comme Conso
an e e Adri rcial lidat
Ports a ed
USD '000
30 June 2019
(Unaudited)
Segment assets 162 129 45, 15,96 353,5 227,440 75,4 302,8 656,4
,78 ,14 691 3 92 02 42 34
9 9
12, 33, -- 4,658 50,66 84 8,18 8,272 58,93
341 668 7 8 9
· Right-of-use
assets
Equity-accounted -- -- -- 26,52 26,52 -- -- -- 26,52
investees 4 4 4
Unallocated 48,10
assets 8
719
· Right-of-use
assets
Total assets 731,0
66
Segment 74, 71, 11, 12,18 169,0 59,312 38,7 98,10 267,1
liabilities 241 014 573 6 14 88 0 14
12, 33, -- 4,730 50,83 -- 9,38 9,385 60,22
248 858 6 5 1
· Lease
liabilities
recognized
under IFRS 16
Unallocated 283,3
liabilities 93
725
· Lease
liabilities
recognized
under IFRS 16
Total 550,5
liabilities 07
31 December 2018
(Audited)
Segment assets 152 96, 48, 12,78 310,0 220,984 67,6 288,6 598,6
,34 756 117 9 03 72 56 59
1
Equity-accounted -- -- -- 26,00 26,00 -- -- -- 26,00
investees 3 3 3
Unallocated 63,32
assets 3
Total assets 687,9
85
Segment 66, 35, 13, 7,048 122,1 56,969 29,7 86,69 208,8
liabilities 652 248 202 50 25 4 44
Unallocated 263,4
liabilities 20
Total 472,2
liabilities 64
30 June 2018
(Unaudited)
Segment assets 157 101 51, 14,86 325,0 211,925 69,5 281,4 606,5
,62 ,53 022 9 50 52 77 27
7 2
Equity-accounted -- -- -- 23,53 23,53 -- -- -- 23,53
investees 8 8 8
Unallocated 95,06
assets 6
Total assets 725,1
31
Segment 81, 38, 14, 6,440 140,7 59,433 28,6 88,03 228,7
liabilities 982 166 147 35 01 4 69
Unallocated 264,6
liabilities 59
Total 493,4
liabilities 28
3 Segment reporting (continued)
b) Reportable segments (continued)
iii) Other segment information
The following table details other segment information:
BPI VCP Ege Other Total Ortadogu Port Total Unallocated Total
Lim Cruis Cruis Liman of Comme Conso
an e e Adria rcial lidat
Ports ed
USD '000
Six months
ended 30
June 2019
(Unaudited)
Depreciation (5,87 (1,61 (1, (1,74 (10,6 (10,882) (1,60 (12,4 (154) (23,3
and 3) 3) 427 6) 59) 7) 89) 02)
amortisation )
expenses
(372) (352) -- (110) (834) (34) (192) (226) (102) (1,16
2)
·
Depreciati
on of
right of
use assets
recognised
under IFRS
16
Additions to
non-current
assets
- Capital 948 826 36 102 1,912 2,608 1,109 3,717 29 5,658
expenditures
Total 948 826 36 102 1,912 2,608 1,109 3,717 29 5,658
additions to
non-current
assets
Six months
ended 30
June 2018
(Unaudited)
Depreciation (5,82 (1,32 (1, (1,76 (10,4 (10,517) (1,47 (11,9 (104) (22,5
and 6) 6) 581 0) 93) 2) 89) 86)
amortisation )
expenses
Additions to
non-current
assets
- Capital 1,101 259 46 203 1,609 2,988 900 3,888 85 5,582
expenditures
Total 1,101 259 46 203 1,609 2,988 900 3,888 85 5,582
additions to
non-current
assets
Year ended
31 December
2018
(Audited)
Depreciation (11,3 (2,59 (3, (3,35 (20,3 (21,342) (2,87 (24,2 (120) (44,6
and 50) 5) 027 9) 31) 5) 17) 68)
amortisation )
expenses
Additions to
non-current
assets
- Capital 2,074 927 259 2,361 5,621 4,761 3,443 8,204 982 14,80
expenditures 7
Total 2,074 927 259 2,361 5,621 4,761 3,443 8,204 982 14,80
additions to 7
non-current
assets
3 Segment reporting (continued)
b) Reportable segments (continued)
4) (iv) Geographical information
5)
6) The Port operations of the Group are managed on a worldwide basis, but operational ports and
management offices are primarily in Turkey, Montenegro, Malta, Spain and Italy. The geographic
information below analyses the Group's revenue and non-current assets by countries. In presenting the
following information, segment revenue has been based on the geographic location of port operations and
segment non-current assets were based on the geographic location of the assets.
Revenue Six months ended Six months ended Year ended
30 June 2019 30 June 2018 31 December 2018
(USD '000) (USD '000) (USD '000)
(Unaudited) (Unaudited) (Audited)
Turkey 29,860 30,276 66,985
Montenegro 4,475 6,172 10,042
Malta 6,249 5,677 13,017
Spain 12,500 13,348 31,577
Italy 1,514 1,083 3,191
Croatia 11 -- --
54,609 56,556 124,812
Non-current assets As at As at As at
30 June 2019 31 December 30 June 2018
(USD '000) 2018 (USD '000)
(Unaudited) (USD '000) (Unaudited)
(Audited)
UK 13,363 12,048 148
Turkey 234,027 243,224 265,512
Spain 136,591 129,695 136,434
Malta 127,308 94,703 96,839
Montenegro 72,512 65,202 65,243
Italy 6,412 6,962 7,420
Croatia 3,063 -- --
Unallocated 29,143 29,071 25,030
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DJ Global Ports Holding PLC: Interim Results -14-
622,419 580,905 596,626
Non-current assets relating to deferred tax assets and financial instruments (including equity-accounted
investees) are presented as unallocated. Non-current assets as at 30 June 2019 include the right of use
assets recognised under IFRS 16.
1) (v) Information about major customers
The Group did not have a single customer that accounted for more than 10% of the Group's consolidated net
revenues in any of the periods presented.
4) Seasonality of Revenue
Sales from the Cruise business are more heavily weighted towards the second half of the calendar year with,
on average, approximately 62% of annual sales arising during the July to December period for the last three
years. In 2018, 45% of the Group's full year revenue fell in the first six months, 43% in 2017 and 46% in
2016.
5) Revenue
The Group's operations and main revenue streams are those described in the last annual financial
statements. The Group's revenue is derived mainly from cruise and commercial operations.
5 Revenue (continued)
For the six month period 30 June, revenue comprised the following:
BPI VCP EP other Total Port Port of Total Total
cruise Cruise Akdeniz Adria Commerci Consolid
ports al ated
(USD 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
'000)
Point in
time
Container -- -- -- -- -- -- -- -- -- -- 14,9 18,9 2,75 2,77 17,6 21,7 17,6 21,7
revenue 30 48 7 0 87 18 87 18
Landing 10,8 11,3 2,51 2,15 784 298 1,16 1,07 15,3 14,8 -- -- -- -- -- -- 15,3 14,8
fees 89 24 0 0 0 6 43 48 43 48
Port 753 772 483 377 757 844 181 191 2,17 2,18 8,44 3,20 104 142 8,55 3,34 10,7 5,52
service 4 4 8 2 2 4 26 8
revenue
Cargo -- -- -- -- -- -- -- -- -- -- 2,15 4,74 1,05 2,60 3,20 7,35 3,20 7,35
revenue 1 9 5 2 6 1 6 1
Domestic 164 342 -- -- 20 44 4 11 188 397 19 23 9 7 28 30 216 427
water
sales
Income -- -- 1,87 1,77 -- -- -- -- 1,87 1,77 -- -- -- -- -- -- 1,87 1,77
from duty 5 6 5 6 5 6
free
operation
s
Other 104 -- 153 -- 235 86 421 42 913 128 382 512 237 -- 619 512 1,53 640
revenue 2
Over time
Rental 590 910 1,22 1,37 503 464 230 307 2,55 3,05 347 563 313 651 660 1,21 3,21 4,26
income 8 3 1 4 4 1 8
Habana -- -- -- -- -- -- 813 -- 813 -- -- -- -- -- -- -- 813 --
Managemen
t fee
Total 12,5 13,3 6,24 5,67 2,29 1,73 2,80 1,62 23,8 22,3 26,2 27,9 4,47 6,17 30,7 34,1 54,6 56,5
00 48 9 6 9 6 9 7 57 87 77 97 5 2 52 69 09 56
The following table provides information about receivables, contract assets and contract liabilities from
contracts with customers;
Revenue Period ended Period ended Year ended
30 June 2019 30 June 2018 31 December
2018
(USD '000) (USD '000)
(USD '000)
Receivables, which 19,865 15,277 12,129
are included in
'trade and other
receivables'
Contract assets 3,084 243 797
Contract liabilities (1,427) (672) (879)
21,522 14,848 12,047
The contract assets primarily relate to the Group's rights to consideration for work completed but not
billed at the reporting date on Commercial services provided to vessels and rental agreements. The contract
assets are transferred to receivables when the rights become unconditional. This occurs when the Group
issues an invoice to the customer.
The contract liabilities primarily relate to the advance consideration received from customers for
providing services, for which revenue is recognised over time. These amounts will be recognised as revenue
when the services has provided to customers and billed, which was based on the nature of the business less
than one week period.
The amount of $879 thousand recognised in contract liabilities at the beginning of the period has been
recognised as revenue for the period ended 30 June 2019.
The amount of revenue recognised in the period ended 30 June 2019 from performance obligations satisfied
(or partially satisfied) in previous periods is $797 thousand. This is mainly due to the nature of
operations.
No information is provided about remaining performance obligations at 30 June 2019 that have an original
expected duration of one year or less, as allowed by IFRS 15.
6) Finance income and costs
Finance income comprised the following:
Finance Six months ended Six months ended Year ended 31
income 30 June 2019 30 June 2018 December 2018
(USD '000) (USD '000) (USD '000)
(Unaudited) (Unaudited) (Audited)
Other foreign 9,653 9,927 26,271
exchange
gains (*)
Interest -- 297 449
income on
related
parties
Interest 725 692 470
income on
banks and
others
Interest 5 -- 33
income from
housing loans
Gain on sale -- 9 --
of marketable
securities
Other income 143 17 732
Total 10,526 10,942 27,955
(*) The Group's foreign exchange gains arise mainly through its operations in Turkey, depreciation of TL
against the functional currencies of these entities results in a benefit as the cost base is significantly
more weighted to TL than the revenues.
The income from financial instruments within the category financial assets at amortized costs is USD 870
thousand (30 June 2018: USD 1,010 thousand, 31 December 2018: USD 952 thousand).
Finance costs comprised the following:
Finance costs Six months Six months ended Year ended 31
ended 30 June 30 June 2018 December 2018
2019
(USD '000) (USD '000)
(USD '000)
(Unaudited) (Audited)
(Unaudited)
Interest 12,671 12,140 25,005
expense on
loans and
borrowings
Foreign 13,068 9,260 19,827
exchange
losses on
loans and
borrowings (*)
Interest 1,655 103 192
expense on
lease
obligations
Other foreign 879 171 14,417
exchange
losses
Other interest 8 161 17
expenses
Letter of 118 120 158
guarantee
commission
expenses
Loan 365 34 103
commission
expenses
Unwinding of 122 149 303
discounts
during the
year
Other costs 77 159 845
Total 28,963 22,297 60,867
(*) The Group's foreign exchange losses arise mainly through its USD denominated borrowings held in a
Turkish Lira functional currency entity.
The interest expense for financial liabilities not classified as fair value through profit or loss is USD
14,334 thousand (30 June 2018: USD 12,404 thousand, 31 December 2018: USD 25,325 thousand).
7) Taxation
Income tax expense is recognised based on management's estimate of the average annual effective income tax
rate for each relevant taxing jurisdiction and applied individually to the interim period pre-tax income of
each jurisdiction. The estimated average annual tax rate used for the year to 30 June 2019 is 21.02%,
increasing compared to 16.22% for the six months ended 30 June 2018. The increase in the estimated tax rate
is mainly due to higher taxable profits in the cruise ports which are based in higher tax jurisdictions
combined with higher tax rates in Europe and lower taxable profit from commercial ports which are based in
lower tax jurisdictions.
8) Trade and other receivables
Six months ended Year ended 31 Six months ended
30 June 2019 December 2018 30 June 2018
(USD '000) (USD '000) (USD '000)
(Unaudited) (Audited) (Unaudited)
Trade 22,950 12,926 15,520
receivables
Deposits and 18,185 5,602 12
advances
given(*)
Other 1,781 1,471 1,349
receivables
Total trade 42,916 19,999 16,881
and other
receivables
(*) The increase in deposits and advances given is related to cash collaterals for issuance of guarantee
letters in Italy and Tunusia.
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Venetto Sviluppo, the 51% shareholder of APVS, which in turn owns a 53% stake in Venezia Terminal Passegeri
S.p.A (VTP), has a put option to sell its shares in APVS partially or completely (up to 51%) to Venezia
Investimenti (VI). This option originally can be exercised between 15th May 2017 and 15th November 2018,
extended until the end of November 2021. If VS exercises the put option completely, VI will own 99% of APVS
and accordingly 71.51% of VTP. The Group has given a guarantee letter for its portion of 25% in VI, which
in turn has given the full amount of call option as guarantee letter to VS.
The Group bid to acquire Goulette Shipping Cruise, the company that operates the cruise terminal in La
Goulette, Tunisia. During the finalization of concession agreement, Group provided a cash collateral to
Tunisia government authority. The majority of these cash collateral have been returned back post period
end.
9) Capital and reserves
Dividends
Dividend distribution declarations are made by the Company in GBP and paid in USD in accordance with its
articles of association, after deducting taxes and setting aside the legal reserves as discussed above.
GPH PLC declared a 2018 final dividend of GBP 0.212 per share to its shareholders on 24 May 2019 and paid
it on 5 July 2019, giving a distribution of GBP 13,319 thousand (USD16,849 thousand). Other dividend
distributions in 2019 were made by Valletta Cruise Port to other shareholders, on which they have
non-controlling interest, amounting to USD 1,786, and Cagliari to other shareholders amounting to USD 65.
GPH PLC declared on 13 August 2018 and paid on 26 October 2018, a 2018 interim dividend of GBP 0.215 per
share to its shareholders, giving a distribution of GBP 13,571 thousand (USD 17,710 thousand).
GPH PLC declared 2017 final dividend of GBP 0.201 per share to its shareholders on 12 March 2018 and paid
on 9 May 2018, giving a distribution of GBP 12,628 thousand (USD 17,132 thousand).
The total dividends paid in 2018 were USD 34,843 thousand. Other dividend distributions were made by
Valletta Cruise Port to other shareholders, on which they have non-controlling interest, amounting to USD
1,320, BPI to other shareholders amounting to USD 2,409, and Cagliari to other shareholders amounting to
USD 68.
10) Loans and borrowings
Loans and borrowings comprised the following:
Short term loans and As at As at As at
borrowings
30 June 2019 31 December 30 June 2018
(USD '000) 2018 (USD '000)
(Unaudited) (USD '000) (Unaudited)
(Audited)
Short term portion of 18,549 18,558 18,551
Eurobond issued (i)
Short term bank loans 3,339 12,031 6,600
3,259 -- 533
· TL
80 12,031 6,067
· Other currencies
Short term portion of 33,125 16,853 21,612
long term bank loans
834 575 332
· TL
32,291 16,278 21,280
· Other currencies
Lease obligations 3,282 1,313 1,311
1,564 1,313 1,311
· Finance leases
1,718 -- --
· Lease obligations
recognized under
IFRS 16
Total 58,295 48,755 48,074
Long term loans and As at As at As at
borrowings
30 June 2019 31 December 30 June 2018
(USD '000) 2018 (USD '000)
(Unaudited) (USD '000) (Unaudited)
(Audited)
Long term portion of 231,972 231,666 231,198
Eurobonds issued (i)
Long term bank loans 58,946 66,038 74,332
25 25,565 224
· TL
58,921 40,473 74,108
· Other currencies
Finance lease 60,736 592 1,217
obligations
1,509 592 1,217
· Finance leases
59,227 -- --
· Lease obligations
recognized under
IFRS 16
Total 351,654 298,296 306,747
(i) The sales process of the Eurobond issuances amounting to USD 250 million with 7 years of maturity, and
a 8.125% coupon rate based on 8.250% reoffer yield was completed on 14 November 2014. Coupon repayment are
made semi-annually. The bonds are quoted on the Irish Stock Exchange.
Eurobonds contain the following key financial covenants:
If a concession termination event occurs at any time, Global Liman (the "Issuer") must offer to repurchase
all of the notes pursuant to the terms set forth in the indenture (a "Concession Termination Event Offer").
In the Concession Termination Event Offer, the Issuer will offer a "Concession Termination Event Payment"
in cash equal to 100% of the aggregate principal amount of notes repurchased, in addition to accrued and
unpaid interest and additional amounts, if any, on the notes repurchased, to the date of purchase (the
"Concession Termination Event Payment Date"), subject to the rights of holders of notes on the relevant
record date to receive interest due on the relevant interest payment date.
10 Loans and borrowings (continued)
According to the Eurobond issued by Global Liman, the consolidated leverage ratio may not exceed 5.0 to 1
(incurrence covenant). The consolidated leverage ratio as defined in the Eurobond includes Global Liman as
the issuer and all of its consolidated subsidiaries excluding the Malaga Cruise Port and Valletta Cruise
Port (both being Unrestricted Subsidiaries as defined in the Eurobond). Irrespective of the consolidated
leverage ratio, the issuer will be entitled to incur any or all of the following indebtedness:
· Indebtedness incurred by the Issuer, Ege Ports ("Guarantor") or Ortadogu Liman ("Guarantor") pursuant
to one or more credit facilities in an aggregate principal amount outstanding at any time not exceeding
USD 5 million;
· Purchase money indebtedness incurred to finance the acquisition by, the Issuer or a Restricted
Subsidiary, of assets in the ordinary course of business in an aggregate principal amount which, when
added together with the amount of indebtedness incurred and then outstanding, does not exceed USD 10
million; and
· Any additional indebtedness of the Issuer or any Guarantor (other than and in addition to indebtedness
permitted above) and Port of Adria indebtedness, provided, however, that the aggregate principal amount
of Indebtedness outstanding at any time of this clause does not exceed USD 20 million; and provided
further, that more than 50% in aggregate principal amount of any Port of Adria indebtedness incurred
pursuant to this clause is borrowed from the International Finance Corporation and/or the European Bank
for Reconstruction and Development.
Group debt covenants are calculated based on applicable IFRSs as of the time the lease obligations were
initially recognised. Therefore, the group debt covenants as at period end have not been affected from the
transition to IFRS 16. Management will assess in the future for any new transactions that will be entered
into, depending on the nature of them, whether debt covenants' calculations are affected.
11) Provisions
For the period ended 30 June, the movements of the provisions as below:
Replacement Port Italian Unused Legal Other Total
provisions of Ports vacati
for Creuers Adri Concess ons
(*) a ion fee
Conc provisi
essi on
on (***)
fee
prov
isio
n
(**)
Balance at 6,138 1,43 1,668 206 200 173 9,817
1 January 2
Reversal -- (1,4 (377) -- -- -- (1,80
due to IFRS 32) 9)
16
application
Provisions 256 -- -- 100 1,083 22 1,461
created
Provisions -- -- (132) -- (12) -- (144)
utilised
Reversal of -- -- -- -- (12) -- (12)
provisions
Unwinding 97 -- 25 -- -- -- 122
of
discounts
Currency (39) -- (9) (18) (5) (2) (73)
translation
difference
Balance at 6,452 -- 1,175 288 1,254 193 9,362
30 June
Non-current 6,452 -- 908 -- -- 28 7,388
Current -- -- 267 288 1,254 165 1,974
6,452 -- 1,175 288 1,254 193 9,362
(*) As part of the concession agreement between Creuers and the Barcelona and Malaga Port Authorities
entered in 2013, the Company has an obligation to maintain the port equipment in good operating condition
throughout its operating period, and in addition return the port equipment to the Port Authorities in a
specific condition at the end of the agreement.
11 Provisions (continued)
(**) On 27 December 2013, the Government of Montenegro and Container Terminal and General Cargo JSC-Bar
("CTGC") entered into an agreement regarding the operating concession for the Port of Adria-Bar which
terminates on 27 December 2043. From the fourth year of the agreement, CTGC had an obligation to pay a
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concession fee to the Government of Montenegro of Euro 500,000 per year until the end of the agreement. The
expense relating to this concession agreement is recognized on a straight-line basis over the concession
period, giving rise to an accrual in the earlier years. For the annual year starting at 1 January 2019, the
Group has adopted option 2 of modified retrospective approach under which Right-of-use assets are measured
at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.
The Group reversed this accrual through Right of use asset as explained on Note 2 (d) (i).
(***) On 16 December 2009, Ravenna Port Authority and Ravenna Passenger Terminal S.r.l. ("RTP") entered
into an agreement regarding the operating concession for the Ravenna Passenger Terminal which terminates on
27 December 2019. RTP had an obligation to pay a concession fee to the Port Authority of Euro 86,375 per
year until end of concession. The expense relating to this concession agreement is recognized on a
straight-line basis over the concession period, giving rise to an accrual in the earlier years.
On 13 June 2011, Catania Port Authority and Catania Cruise Terminal S.r.l. ("CCT") entered into an
agreement regarding the operating concession for the Catania Passenger Terminal which terminates on 12 June
2026. CCT had an obligation to pay a concession fee to the Catania Port Authority of Euro 135,000 per year
until end of concession. The expense relating to this concession agreement is recognized on a straight-line
basis over the concession period, giving rise to an accrual in the earlier years.
On 14 January 2013, Cagliari Cruise Port ("CCP") and Cagliari Port Authority entered into an agreement
regarding the operating concession for the Cagliari Cruise Terminal which terminates on 13 January 2027.
CCP had an obligation to pay a concession fee to the Cagliari Port Authority of Euro 44,315.74 per year
until end of concession. The expense relating to this concession agreement is recognized on a straight-line
basis over the concession period, giving rise to an accrual in the earlier years. For the annual year
starting at 1 January 2019, the Group has reclassified this accrual to lease liabilities related to IFRS
16.
12) Earnings / (Loss) per share
The Group presents basic earnings per share ("basic EPS") data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period, less own shares acquired.
During the year, the Group introduced share-based payments as part of its long-term incentive plan to
directors and senior management. The shares to be granted to the participants of the scheme are only
considered as potential shares when the market vesting conditions are satisfied at the reporting date. None
of the market conditions are satisfied at the reporting date and therefore there is no dilution of the
earnings per share or adjusted earnings per share (Note 2f). There are no other transactions that can
result in dilution of the earnings per share or adjusted earnings per share (Note 2f).
Earnings per share is calculated by dividing the profit attributable to ordinary shareholders, by the
weighted average number of shares outstanding.
As at As at As at
30 June 2019 30 June 2018 31 December
(USD '000) (USD '000) 2018
(Unaudited) (Unaudited) (USD '000)
(Audited)
(Loss) / Profit (16,317) (3,789) 770
attributable to owners
of the Company
Weighted average 62,826,963 62,826,963 62,826,963
number of shares
Basic and diluted (26.0) (6.0) 1.23
(loss) / earnings per
share (cents per
share)
13) Commitment and contingencies
Legal proceedings in relation to Ortadogu Antalya, Ege Liman and Bodrum Liman's applications for extension
of their concession rights
On 6 June 2013, the Turkish Constitutional Court partially annulled a law that prevented operators of
privatised facilities from applying to extend their operating term. The respective Group companies then
applied to extend the concession terms of Port Akdeniz-Antalya, Ege Port-Kusadasi and Bodrum Cruise Port to
give each concession a total term of 49 years from original grant date. After these applications were
rejected, the respective Group companies filed lawsuits with administrative courts challenging the
decisions.
After going through legal proceedings, Bodrum Cruise Port's application for the extension of concession
term is accepted by the relevant administrative authority. The extension agreement is executed on December
2018 which has extended the remaining concession period to 49 years. The original concession agreement was
due to expire in December 2019 and following this new agreement the concession will now expire in December
2067.
Port Akdeniz-Antalya filed lawsuits against Privatization Administration and the General Directorate of
Turkey Maritime Organization requesting cancellation with respect to rejection of the extension
applications. The Court dismissed the case and the Group lawyers appealed the Court decision to the Council
of State. The Counsel of State rejected the appeal of Port Akdeniz-Antalya and approved the decision of the
Court. The Group lawyers have applied to the Council of State for reversal of this judgement and the case
is still pending.
The 30 June 2019 financial statements have been prepared assuming the current concession length.
Ege Port-Kusadasi filed lawsuits against Privatization Administration and General Directorate of Turkey
Maritime Organization requesting cancellation with respect to rejection of the extension applications. The
Court dismissed the case and the Group lawyers appealed the Court decision to the Council of State. The
Counsel of State accepted the appeal and reversed the Court's judgement in favor of Ege Port-Kusadasi. The
Privatization Administration applied to the Council of State for reversal of this judgement and this time,
the Council of State has changed its standpoint and approved the Court's decision against Ege
Port-Kusadasi. In this regard, Ege Port-Kusadasi has submitted an individual application to the
Constitutional Court. Constitutional Court has rendered its decision against Ege Port-Kusadasi and the
judicial process for the extension of the concession period has been concluded against Ege Port-Kusadasi.
Accordingly, upon expiration of the concession period in 2033, Ege Port-Kusadasi will need to participate
in the tender for new concession term.
The 30 June 2019 financial statements have been prepared assuming the current concession length.
Competition Authority Investigation
On 29 April 2019, the Competition Authority notified Port Akdeniz, that it has commenced an investigation
into Port Akdeniz due to an alleged breach of Article 6 of the Law on the Protection of Competition, Law
No. 4054 due to excessive pricing concerns on certain services. Port Akdeniz has engaged legal
representation and submitted a full defence against all allegations on 28 May 2019. By law, the Competition
Authority has 6 months from the submission date to evaluate the defences and prepare an investigation
report which can be extended by an additional 6 months. At this stage, the claim has not been matured and
it depends on the result of the final investigation report to be issued by the Competition Authority. Whole
process before the Competition Authority may take up to 18 months (excluding the possibility to file an
administrative lawsuit against a negative decision of the Competition Authority).
No provision is recognised in respect of this matter.
13 Commitment and contingencies (continued)
Other legal proceedings
The Port of Adria-Bar (Montenegro) is a party to the disputes arising from the collective labour agreement
executed with the union by Luka Bar AD (former employer/company), which was applicable to Luka Bar AD
employees transferred to Port of Adria-Bar. The collective labour agreement has expired in 2010, before the
Port was acquired by the Group under the name of Port of Adria-Bar. However, a number of lawsuits have been
brought in connection to this collective labour agreement seeking (i) unpaid wages for periods before the
handover of the Port to the Group, and (ii) alleged underpaid wages as of the start of 2014. On March 2017,
the Supreme Court of Montenegro adopted a Standpoint in which it is ruled that collective labour agreement
cannot be applied on rights, duties and responsibilities for employees of Port of Adria-Bar after September
30th, 2010. Although the Standpoint has established a precedent that has applied to the claims for the
period after September 30th, 2010; there are various cases pending for claims related to the period of
October 1st, 2009 - September 30th, 2010. In respect of the foregoing period of one year, the Port of
Adria-Bar has applied to the Constitutional Court to question the alignment of the collective labour
agreement with the Constitution, Labor Law and general collective agreement. The Port of Adria-Bar is
notified that the application for initiating the procedure for reviewing the legality of the Collective
Agreement has been rejected due to a procedural reason, without evaluating the arguments submitted. The
Management is now in discussions with the local lawyers to determine defences for any potential claim and
take it to the higher court and eventually to European courts for final decision once we exhaust local law
avenue.
No provision is recognised in respect of this matter.
Global Liman Isletmeleri AS, as the majority shareholder of one of its subsidiaries, has paid a share
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purchase amount of 1,500,000 USD to the shareholder of the relevant subsidiary, and the shareholder has not
transferred its shares in the subsidiary to Global Liman. Global Liman has initiated an action of debt
against the shareholder. It is expected that the case would resolve for the return of the share purchase
amount or the completion of the share transfer.
No provision is recognised in respect of this matter.
One of our clients in the cement business has initiated a lawsuit against Port Akdeniz in relation to a
commercial dispute on the fees payable by that client for its import and export transactions in 2018.
Furthermore, a counter-claim has been initiated by Port Akdeniz for an amount due from this client in
relation to loading services provided and extra fees incurred due to delays. Both cases are pending before
the competent court.
A provision is recognised in respect of this matter.
14) Related parties
There are no changes in the related parties of these interim financial statements compared to those used in
the Group's consolidated financial statements as at and for the year ended 31 December 2018, except for
European Bank of Reconstruction and Development ("EBRD"), which sold its shares in GPH PLC.
All related party transactions between the Company and its subsidiaries have been eliminated on
consolidation and are therefore not disclosed in this note.
Due from related parties
Current receivables from related parties comprised the following:
Current receivables As at As at As at
from related parties
30 June 2019 31 December 30 June 2018
(USD '000) 2018 (USD '000)
(Unaudited) (USD '000) (Unaudited)
(Audited)
Global Yatirim Holding 681 602 478
Adonia Shipping (*) 61 67 855
Naturel Gaz (*) 73 72 74
Straton Maden 67 73 92
Global Menkul -- -- 141
IEG Global 57 57 --
Global Ports Holding 3 47 22
BV
Lisbon Cruise -- 37 --
Terminals lda
Adamas 9 -- --
Aristaeus Limited 9 -- --
Mehmet Kutman 1 17 20
Aysegül Bensel -- 1 --
Others (*) 96 54 48
Total 1,057 1,027 1,730
(*) These amounts are payments in advance for contracted work. These have an interest rate changed of 9.75%
p.a. as at 30 June 2019 (31 December 2018: 9.75%, 30 June 2018: 8.50%).
Due to related parties
Current payables to related parties comprised the following:
As at As at As at
Current payables to 30 June 2019 31 December 30 June 2018
related parties
(USD '000) 2018 (USD '000)
(Unaudited) (USD '000) (Unaudited)
(Audited)
Mehmet Kutman 344 153 157
Global Sigorta (*) 41 309 57
Global Menkul (*) -- 1 1
Aysegül Bensel 114 53 --
Other 5 26 35
Total 504 542 250
(*) These amounts are related to professional services provided. These have an interest rate of 19.50% p.a.
as at 30 June 2019 (31 December 2018: 19.50%, 30 June 2018: 8.50%).
14 Related parties (continued)
Transactions with related parties
Transactions with other related parties comprised the following for the following periods:
(USD Six months ended Six months Year ended
'000) ended
30 June 2019 31 December
30 June 2018 2018
(Unaudited)
(Unaudited) (Audited)
Interest Other Interest Other Interest Other
received Received received
Global -- -- 297 -- 252 --
Yatiri
m
Holdin
g
Global -- -- -- -- 197 --
Menkul
Total -- -- 297 -- 449 --
USD
'000
Interest Other Interest Other Interest Other
Paid Paid paid
Global -- -- -- 1 -- --
Yatiri
m
Holdin
g
Global -- -- -- -- -- --
Menkul
Total -- -- -- 1 -- --
15) Financial Instruments' fair value disclosures
Fair value measurements
The information set out below provides information about how the Group determines fair values of various
financial assets and liabilities.
Determination of the fair value of a financial instrument is based on market values when there are two
counterparties willing to sell or buy, except under the conditions of events of default forced liquidation.
The Group determines the fair values based on appropriate methods and market information and uses the
following assumptions: the fair values of cash and cash equivalents, other monetary assets, which are short
term, trade receivables and payables and long term foreign currency loans and borrowings with variable
interest rates and negligible credit risk change due to borrowings close to year end are expected to
approximate to the carrying amounts.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value
that are either observable or unobservable and consists of the following three levels:
· Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
· Level 2: Input other than quoted prices included within level 1 that are observable for the assets or
liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
· Level 3: Inputs for the asset or liability that is not based on observable market data (unobservable
inputs).
Except as detailed in the following table, the directors consider the carrying amounts of the Group's
financial assets and financial liabilities were approximate to their fair values.
Note As at 30 June As at 31 As at 30 June
2019 December 2018 2018
(Unaudited) (Audited) (Unaudited)
(USD Carrying Fair Carrying Fair Carrying Fair
'000)
Financial
assets
Other 12,613 12,613 12,009 12,009 11,782 11,782
financial
assets
Financial
liabiliti
es
Loans and 10 345,931 342,37 345,676 334,963 352,294 361,345
borrowing 7
s
Lease 64,018 64,018 1,905 1,905 2,528 2,528
obligatio
ns
15 Financial Instruments' fair value disclosures (continued)
Fair value measurements (continued)
The Group's convertible debt instrument investment is issued by Dreamlines GmbH. The loan is repayable in
quarterly instalments starting February 2020 until its final maturity in May 2021, unless the loan is
converted into Dreamlines' equity. This feature was solely at GPH's discretion and valid until May 2019.
Management decided not to exercise this option, and therefore the investment is solely a debt instrument.
Key terms of the instrument include that, other financial indebtedness outstanding and incurrence of any
other debt is restricted, and the loan is secured by bank account pledges, receivable assignments and
security assignment of key intellectual property.
The Group's debt instrument, issued by Dreamlines, remains to be included in Level 3 of the fair value
hierarchy. On the basis that no alternative or contradictory evidence has been identified, Management
concluded that the assumption of continuing to recognise the FVTPL instrument at amortised cost at this
point is reasonable.
The Group's lease obligations fair value has been obtained using the discounted cash flow model.
Reconciliation of financial asset:
2019 2018
Unquoted equities Unquoted equities
USD'000 USD'000
Opening Balance 12,013 --
Total gains or losses
- in profit or loss* 600 (195)
- in other comprehensive -- --
income
Purchases -- 11,977
Closing Balance 12,613 11,782
............
*Gains or losses included in
profit or loss attributable
to assets and liabilities
still held as at 30 June
Foreign exchange losses (76) (195)
Interest income 676 --
Other loans have been included in Level 2 of the fair value hierarchy as they have been valued using quotes
available for similar liabilities in the active market. The valuation technique and inputs used to
determine the fair value of the loans and borrowings is based on discounted future cash flows and discount
rates.
The groups Eurobond liability has been included in level 1 of the fair value hierarchy as it has been
valued using quotes available on its quoted market.
The fair value of loans and borrowings has been determined in accordance with the most significant inputs
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being discounted cash flow analysis and discount rates.
15 Financial Instruments' fair value disclosures (continued)
Fair value measurements (continued)
Financial instruments at fair value
The table below analyses the valuation method of the financial instruments carried at fair value. The
different levels have been defined as follows:
(USD '000)
Level 1 Level 2 Level 3 Total
As at 30 June Other financial -- -- 12,613 12,61
2019 (Unaudited) assets 3
Derivative -- 669 -- 669
financial
liabilities
As at 31 Other financial -- -- 12,009 12,00
December 2018 assets 9
(Audited)
Derivative -- 617 -- 617
financial
liabilities
As at 30 June Other financial -- -- 11,782 11,78
2018 (Unaudited) assets 2
Derivative -- 788 -- 788
financial
liabilities
The valuation technique and inputs used to determine the fair value of the interest rate swap is based on
future cash flows estimated based on forward interest rates (from observable yield curves at the end of the
reporting period) and contract interest rates, discounted at a rate that reflects the credit risk of
various counterparties.
16) Events after the reporting date
The Group paid a 2018 final dividend of GBP 0.212 per share to its shareholders on 5 July 2019, giving a
distribution of GBP 13,319 thousand (USD 16,849 thousand).
The Group decided to pay an interim dividend equivalent to USD 0.199 per share to its shareholders, giving
a distribution of USD 12,500 thousand.
The Group has reorganised its cruise operations under a new Regional structure. Under the new structure,
three Regional Directors will be appointed to manage East Mediterranean, West Mediterranean and Americas
regions.
The Group announced that in light of the emerging opportunities in its cruise business it is undertaking a
strategic review of the Group, which is being carried out by Goldman Sachs International. The purpose of
the strategic review is to explore ways to maximise value for all stakeholders and includes a range of
potential corporate activity including a sale of certain assets as well as strategic investments and
partnerships.
Category Code: IR
TIDM:
Sequence No.: 17241
EQS News ID: 859793
End of Announcement EQS News Service
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