Global Ports Holding Plc

Interim results for the six months ended 30 June 2020

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 2020.

Financial Summary	H1 2020		H1 2020	H1 2019	YoY Growth	YoY CCY
			CCY6		(%)	Growth (%)
Total Revenue ($m) 1	54.2		54.4	54.6	-0.8%	-0.3%
Cruise Revenue ($m) 8	33.9		34.0	23.9	41.9%	42.5%
Ex IFRIC 12 Cruise Revenue ($m)10	11.9			23.9	-50.1%
Commercial Revenue ($m)	20.3		20.4	30.8	-33.9%	-33.6%
Segmental EBITDA ($m) 2	16.8		16.9	39.1	-56.9%	-56.8%
Cruise EBITDA ($m) 9	3.9		3.9	16.8	-76.9%	-76.7%
Commercial EBITDA ($m)	12.9		13.0	22.3	-41.9%	-41.8%
Adjusted EBITDA ($m)	13.5		13.5	34.8	-61.2%	-61.1%
Segmental EBITDA Margin	31.1%		31.0%	71.6%
Cruise Margin	11.5%		11.5%	70.5%
Commercial Margin	63.6%		63.5%	72.4%
Adjusted EBITDA Margin3	24.9%		24.9%	63.7%
Operating Profit ($m)	(19.6)			1.3	-1622%
Profit/(Loss) before tax ($m)	(42.0)			(13.8)	203.4%
Profit/(Loss) after tax ($m)	(34.9)			(15.8)	121.3%
Underlying profit for the period ($m) 4	(3.5)			6.0	-158.8%
Adjusted EPS (c) 5	(5.6)			9.5	-158.8%
DPS (c)	n/a			19.9
Net Debt	436.9			351.1	24.4%
Net Debt excluding IFRS 16 Finance Lease	372.6			286.8	29.9%
Cash and cash equivalents	122.3			58.9	107.6%
KPIs
Passengers (m PAX) 7	1.3			2.0	-35.7%
General & Bulk Cargo ('000 tons)	583			458	27.3%
Container Throughput ('000 TEU)	91			106	-13.8%

 

Emre Sayin, Chief Executive Officer, said:

"With the Covid-19 crisis continuing to cause unprecedented disruption to both global economies and the global travel sector, cash preservation remains the key focus of the Group. Our flexible business model and our decisive actions to reduce costs early in the crisis means that the Group is well positioned to navigate through it.

While cruise volumes remain very low versus historical standards, we currently expect a steady increase in cruise ship calls and passenger volumes over the remainder of the year. And it is encouraging to note that our cruise line partners continue to report strong bookings for 2021. In the meantime, we continue to work closely with all relevant partners and health authorities on the safe return to cruising across our portfolio.

When the cruise industry begins to exit this crisis in a meaningful way, we expect significant new cruise port opportunities will present themselves. As the world's largest cruise port operator, with a proven and flexible business model, an ability to bring global best practice to ports and destinations, including leading health and safety standards, as well as the ability to combine the raising of financing for new projects with a flexible approach to cruise port concession and management, Global Ports Holding remains in a strong position to play a leading role as new opportunities arise."

 

 

Overview

• The Covid-19 crisis has caused unprecedented disruption to global economies and the global travel sector, and has had a significant, negative impact on the business. The global cruise industry effectively shut down in Q2 2020, for the first time in its history and as a result our cruise ports have experienced a sharp fall in revenues. While our Commercial ports are exposed to global economic growth and macro-economic factors which have been impacted by Covid-19, trading at these ports in Q2 has been broadly in line with Q1 trading.

• Total consolidated revenues were $54.2m in the period down 0.8% yoy (-0.3% ccy). Cruise Revenue grew 41.9% reflecting the impact of IFRIC-12 on Nassau Cruise Port. IFRIC-12 results in $22.0m of construction revenue being recognised in respect of construction services provided at Nassau Cruise Port. IFRIC-12 has no impact on cash generation. Excluding this impact Cruise Revenue fell 50.1%. Commercial Revenue fell 33.9% in the period, primarily driven by the impact of the previously disclosed oil services contract in H1 2019, excluding this impact Commercial Revenue fell 19.1%.
  • Segmental EBITDA fell 56.9% (56.8% ccy) to $16.8m. With Cruise EBITDA falling 76.9% (76.7% ccy) to $3.9m, excluding the IFRIC-12 impact on Nassau Cruise Port, Cruise EBITDA fell 79.5%. Commercial EBITDA fell 41.9% (41.8% ccy) to $12.9m, excluding the impact of the 2019 oil services contract, Commercial EBITDA fell by 25.9%. Despite the onset of the Covid-19 crisis, Q2 Commercial EBITDA was stable at -0.6% QoQ.
  • H1 Adjusted EBITDA fell 61.2% (61.1% ccy) to $13.5m, down from to $34.8m in H1 2019. Central costs were reduced by 22.1% in the period, reflecting the prompt actions taken in Q2. The cost reduction program has reduced costs by about two thirds compared to Q1 2020, the full impact of which will be visible during H2-2020.
• The operating loss of $19.6m in the period compared to a H1 2019 operating profit of $1.3m, is largely driven by the $21.3m fall in Adjusted EBITDA yoy. The operating loss is Adjusted EBITDA after port operating rights amortisation expense of $21.0m (H1 2019: $16.9m), amortisation of $6.0m (H1 2019: $6.4m) and one off adjustments and non-operating expenses of $5.4m (H1 2019: $6.9m).
• Loss after tax for the period of $34.9 million (H1 2019: $15.8m) is driven by an increase in net finance costs to $23.0m (H1 2019: $18.4m), a fall in in income from equity accounted associates to $0.7m (H1 2019: $3.3m), while there was a tax credit of $7.1m in the period, compared to a tax expense of $1.9m in H1 2019. The increased net finance costs are due to non-cash loss when revaluing the Eurobond debt, along with non-cash revaluation losses on Turkish entities foreign currency dominated liabilities and the increase in net interest expenses increased to $13.9m (H1 2019: $14.3m). The tax credit reflects the impact of the loss before tax in the period.
• Underlying profit for the period of -$3.5m reflects the loss after tax adjusted for port operating rights amortisation expense of $21.0m (H1 2019: $16.9m).
• Net debt of $436.9m (31 December 2019: $389.2m) increased due to additional financial indebtedness incurred in relation to the Caribbean growth projects for Nassau Cruise Port ($150m unsecured 20-year bond completed in May 2020) and further drawdowns under the Capex facility at Antigua Cruise Port, partially offset by scheduled repayments in other indebtedness and an increase in cash. The leverage ratio as per GPH's Eurobond continues to exceed at 30 June 2020 the incurrence covenant of 5.0x with a value of 6.70x (31 December 2019: 4.65x).
  • In light of the significant impact of the Covid-19 outbreak on the Group the board has elected to suspend the dividend until the cruise industry recovers.

 

Covid-19 crisis management and actions

As previously disclosed on the 14 April 2020 and 10 June 2020, in light of the exceptional circumstances that have engulfed the cruise industry, the board and management took several significant actions to protect the balance sheet and long term future of the business.

On the 14 April 2020 the board stated that the actions taken meant that even under a severe downside scenario the Group would have sufficient cash resources to remain in operation at the end of April 2021. This severe downside scenario included a number of key assumptions, two of which were, an assumption of no cruise calls for the remainder of 2020 and extending into 2021 for certain ports, and for marble container throughput volumes to fall by 75% compared to management expectations over the period from May to September 2020.

While the board and management remain focussed on controlling costs and preserving cash, it is notable that recently some of our cruise ports have started to plan for the first cruise calls following the Covid-19 related suspension of activities and that marble volumes for April to June 2020 are above those achieved in Q12020 and significantly ahead of the key assumption in the severe downside scenario.

Flexible cost base

GPH's cruise port business model is inherently flexible. Outsourced service providers are extensively used across our cruise ports. This means that a high percentage of costs automatically expands and contracts in line with cruise traffic.

The flexibility of this model has helped protect the business and preserve cash during the Covid-19 crisis. With this evident in a Q2 EBITDA loss of just $1.8m in Cruise, despite almost zero cruise calls in the period and underlying Cruise revenue (i.e. excluding Nassau's IFRIC-12 revenue related to construction activity) of only $0.9m.

In addition, trading at our commercial ports has remained positive despite the macroeconomic issues arising in context of Covid-19. Thanks to diversification of GPH's income sources a positive Adjusted EBITDA of $3.2m at the Group level in Q2 2020 was achieved.

Looking ahead, when cruise calls increase and passengers begin to return to our cruise ports, the structure of our business model is such that the majority of the costs will rise or fall depending on the volume. This means that each cruise call at any of our ports should have a positive impact on EBITDA.

In terms of the costs that are not directly driven by cruise calls, as cruise demand recovers, these costs will naturally return. However, we will only allow them to rise in a meaningful way when the demand has reached levels which can be considered sustainable. Investment related costs such as new port project expenses and capex, with the exception of capex in Nassau and Antigua, are expected to remain low for at least the next 12 months.

New Port Capital Commitments

Since the global outbreak of Covid-19 all but essential maintenance capex has been suspended across our portfolio. However, the capex at our new ports in the Caribbean has continued as planned.

In Antigua, the Group has contributed all required equity at closing of the transaction in October 2019. The balance of the necessary investment, required to complete the new pier, will be fully funded through a committed bank loan from a syndicate of lenders.

In Nassau, the construction phase has now begun, with an expected completion date of April 2022. The scheduled capex for the marine component of the construction has been fully financed by the recent issue of a 20-year $150m 8.0% coupon bond by Nassau Cruise Port. Further funding at Nassau Cruise Port will not be required until the second half of 2021.

While new cruise port project expenses have effectively been suspended, the board believes that despite and partly due to Covid-19 there is still considerable scope for future expansion of the business over the medium to long term. While there continues to be a strong appetite to finance investment in cruise port infrastructure, as evidenced by the successful Nassau Cruise Port bond issuance, not all new port projects require up-front investment from GPH.

For example, in Spain GPH recently partnered with Balearia Group in their tender submission for a 35-year concession for the port of Valencia. While the plans include an investment of $37m into the infrastructure, including a new environmentally friendly passenger terminal in the port of Valencia, GPH will not be investing in the infrastructure and will focus solely on managing the cruise port operations. The outcome of this tender is expected to be announced before the year end.

While the Covid-19 crisis has clearly impacted the plans of many current cruise port owners or and local authorities, it will have also impacted the plans of would-be investors in cruise ports. With a proven ability to bring global best practice and leading health and safety protocols to ports as well as the ability to raise financing for new projects even in the most challenging of times, Global Ports Holding is well positioned to play an active role as new opportunities arise.

Strategic Review and Eurobond

On 11 March 2020 GPH announced that following a competitive sales process it had entered exclusive negotiations with a potential buyer of Port Akdeniz. Negotiations continue to progress positively but a final outcome on the sale process has not yet been reached. There can be no certainty as to the timing of the sale or that the terms of a sale will be agreed. A further announcement will be made when it is appropriate to do so. After this process has ended the Group will decide on the most appropriate refinancing structure for its $250m 2021 Eurobond.

The Group's $250m 2021 Eurobond has a covenant of five times Gross Debt to EBITDA for the bond issuer Global Liman, a 100% subsidiary of Global Ports Holding, and its consolidated subsidiaries. As at 30 June 2020, Gross Debt to EBITDA was 6.7x. As an incurrence covenant, the impact is that incurrence of additional debt at Global Liman and its subsidiaries and dividend distributions from Global Liman are restricted until such time as the Gross Debt to EBITDA leverage falls below five times.

 

Cruise - Significant impact from Covid-19

• Cruise EBITDA fell 76.9% (76.7% ccy) to $3.9m in the period, with Cruise Revenue, excluding the impact of IFRIC-12, falling by 50.1% (49.7% ccy) to $11.9m.
• The onset of the global Covid-19 crisis and the suspension of nearly all global tourism, clearly hit our Cruise ports hard in Q2. However, it is testament to the strength and flexibility of GPH's business model that despite only $0.9m of revenue across our cruise ports in Q2 excluding Nassau's IRIC-12 revenue, our Cruise business made and EBITDA loss of just $1.8m in Q2.
• Due to the application of IFRIC-12 for Nassau Cruise Port the capex incurred for this project is accounted for as revenue including a gross profit margin of 2%. In Q2 2020, IFRIC-12 increased reported revenue by $22.0m. The expenditure for the construction activities is recognised as operating expenses. IFRIC-12 has no impact on cash generation.
• Passenger volumes fell 35.7% yoy, with just 1.3m PAX handled in the period.

• The health and safety of our staff, local communities, passengers and crew has always been our first priority. A range of new measures, including universal testing of pre-embarkation testing of passengers, have been put in place across our ports, meeting and often exceeding local and regional regulatory requirements.
• The World Travel and Tourism Council has already endorsed the measures taken in a number of our ports, and has so far provided a "safe travel" stamp for Antigua, Barcelona, Bodrum, Ege Port, Malaga, Valletta, and Zadar.
  • While there remains considerable uncertainty over when cruising will meaningfully start its path back to a new normal, GPH is ready to welcome the safe return of passengers across our portfolio.

 

Commercial - steady underlying performance continues

• Commercial EBITDA fell 41.9% (-41.8% ccy) to $12.9m in the period, with Commercial Revenue falling 33.9%      (-33.6% ccy) to $20.3m. Excluding the previous disclosed impact of the oil services contract in H1 2019 at Port Akdeniz, Commercial EBITDA fell 25.9% in the period.
• Despite the onset of the Covid-19 crisis towards the end of Q1, it is important to note that underlying Q2 Commercial EBITDA was broadly stable in Q2 (-0.6% QoQ).
• General & Bulk Cargo volumes grew 27.3% yoy in H1 2020, while TEU throughput fell 13.8% yoy in H1 2020. Importantly, despite the Covid-19 crisis, Q2 General & Bulk Cargo volumes rose 3.5% QoQ and Q2 TEU Throughput fell just 10.6% QoQ.

 

Outlook & current trading

Looking into the remainder of 2020, the near term outlook for Cruise remains highly uncertain. A number of cruise lines have recently commenced sailings and more are planning to do so over the remainder of 2020. Understandably, there remains considerable uncertainty over these sailings. All of our ports have worked hard and continue to work hard to ensure they play their part in helping the industry set sail once again and that cruise passengers, health authorities and cruise lines are reassured by the new health and safety measures at our ports.

Looking into 2021 and beyond, it is very encouraging to see strong booking trends across all regions. While on-board distancing measures will mean cruise ship occupancy levels are likely to be down in 2021, the level of continued consumer demand is encouraging. Despite these signs, no material revenue and hence no material improvement compared to Q2 2020 is expected in the Cruise segment for the remainder of the year.

Our commercial ports have continued to show stable performance albeit not being fully immune against the major disruptions caused by Covid-19. Over the remainder of the year, we expect our Commercial ports to improve compared to H1 2020.

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: amortisation expense in relation to Port Operation Rights, non-cash provisional income and expenses, non-cash foreign exchange transactions and specific non-recurring expenses and income. Adjusted earnings per share is calculated as underlying profit divided by weighted average number of shares
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 excludes equity accounted associate ports La Goulette, Lisbon Singapore and Venice.
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 La Goulette, Lisbon, Singapore and the contribution from management agreements
10. Revenue Ex IFRIC 12 and Ex IFRIC 12 Segmental EBITDA refers to Nassau Cruise Port Revenue and EBITDA excluding the impact of IFRIC 12.

 

For further information, please contact:

CONTACT
For investor, analyst and financial media enquiries:		For media enquiries:
Global Ports Holding, Investor Relations		Global Ports Holding
Martin Brown		Ceylan Erzi
Telephone: +44 (0) 7947 163 687		Telephone: +90 212 244 44 40
Email: martinb@globalportsholding.com		Email: ceylane@globalportsholding.com

 

A copy of this report will be available on our website www.globalportsholding.com today from 0700hrs (BST).

Investor Call

 

An analyst and investor call will be held today at 3.00pm (BST).

Please email martinb@globalportsholding.com for dial in details

 

 

 

 

Group performance review

With the Covid-19 outbreak leading to an effective global shutdown of leisure travel, including the suspension of cruising in the second quarter, the first half of 2020 has proven to be the most difficult period in the company's history. Group revenue was down just 0.8% (-0.3% ccy) to $54.2m, however, this figure is heavily influenced by the impact of IFRIC-12 on the Nassau Cruise Port concession. Due to the concession agreement granting the Group the right to operate Nassau Cruise Port falling within the scope of IFRIC-12 "Service Concession Arrangements", the Group recognises revenue and operating expenditure as construction takes place to improve the port infrastructure. This revenue does not represent amounts that will be paid directly to the Group by either the local port authority or the ports customers. As a result, we have also presented analysis of the Group's results excluding this revenue and the related expense. This revenue is referred to as 'IFRIC-12' throughout the performance review. Excluding this impact Group revenue fell by 41%.

Adjusted EBITDA fell 61.2% (-61.1% ccy) to $13.5m (H1 2019: $34.8m) in the period. An underlying loss of $3.5m was reported for the period, compared to an underlying profit of $6.0m for the same period last year and loss after tax of $34.9m compared to a $15.8m loss after tax for the same period last year.

2020 was the year that the strategy we set at the IPO in 2017 really started to deliver operational and financial results. Our successful expansion into the Caribbean drove a step change in our Cruise operations in Q1. Unfortunately, the subsequent Covid-19 crisis had a materially negative impact on the business, delaying but not cancelling the impact of our successful expansion in the Caribbean.

In the first half of the year, cruise passenger volumes fell 35.7% to 1.3m (H1 2019: 2.1m, FY 2019: 5.3m). This is in sharp contrast to the reported growth in cruise passenger volumes in Q1 of 146% yoy, which was driven by the first time contribution from the new Caribbean cruise ports in The Bahamas and Antigua. At all ports, including equity accounted associate ports La Goulette, Lisbon, Singapore and Venice, we welcomed 1.6m passengers (H1 2019: 3.3m, FY 2019: 9.3m).

Cruise Revenue in the first half increased by 41.9% to $33.9m (H1 2019: $23.9m, FY 2019: $63.0m), while Cruise EBITDA fell by 76.9% to $3.9m. However, these figures, particularly revenue, are heavily influenced by the application of accounting standard IFRIC 12 on Nassau Cruise Port concession. This increased revenue at Nassau Cruise Port by $22.0m in the period and EBITDA by $0.4m.

With the global shutdown of the cruise industry in Q2, the vast majority of Cruise activity took place in Q1. Excluding IFRIC-12, H2 Cruise revenue and EBITDA was $11.9m and $3.5m respectively, reflecting the global cruise industry shutdown, Q2 Cruise revenue and EBITDA was $0.9m and $-2.2m. Most of the revenue generated in Q2 2020 was Ancillary Revenue such as rental income from retail facilities. On a constant currency basis, first half cruise revenue was $34.0m and Cruise EBITDA was $3.0m.

In the context of a global crisis the underlying performance of our Commercial Port operations was positive in the period. While Commercial revenues fell by 33.6% to $20.3m in the period (H1 2019: $30.8m, FY 2019: $54.8m), excluding the impact of the oil services contract at Port Akdeniz in H1 2019, Commercial revenue fell 19.1%. While Commercial Revenue was stable in Q2, falling by just 4.6%, a strong performance in light of the prevailing crisis.

Revenues from Port Akdeniz fell by 36.5% in H1 2020, while Port Adria's revenue fell by 18.7%. Port Akdeniz's revenue decline reflects the impact of the 2019 Oil services contract, excluding this impact, Port Akdeniz revenue fell 19.3%.

Commercial EBITDA fell by 41.9% to $12.9m, with both ports reporting a decline. Port Akdeniz delivered a decline in EBITDA of 42.6% to $11.9m, however excluding the impact of the 2019 Oil services contract, EBITDA declined 25.9%.

This better underlying performance at Port Akdeniz is reflected in the cargo volumes. In H1 2020, General & Bulk cargo volumes rose 65.7% (Q1 2020: 86.0%), while Container volumes fell -20.7% (Q1 2020: -20.3%).

Port of Adria reported an EBITDA decline of 30.4% to $1.1m.  General & Bulk cargo volumes fell 77.5% (Q1 2020:
-64.8%), while Container volumes fell rose 7.2% (Q1 2020: -9.3%).

Central costs were reduced by 22.1% in the period, reflecting the prompt action taken in Q2 to control costs and conserve cash as the Covid-19 crisis started to have a significant impact on the global cruise industry. The cost reduction program has reduced costs by about two thirds compared to Q1 2020, the full impact of which will be visible during H2 2020.

Loss after tax for the period of $34.9 million (H1 2019: $15.8m) results primarily from the $21.3m fall in Adjusted EBITDA, the net finance costs increase to $23.0m (H1 2019: $18.4m) and decrease in income from equity accounted associates to $0.7m (H1 2019: $3.3m), largely offset by a tax credit of $7.1m, which compares to a tax expense of $1.9m in H1 2019. The increased net finance costs are due to non-cash loss when revaluing the Eurobond debt, along with non-cash revaluation losses on Turkish entities foreign currency dominated liabilities and the increase in net interest expenses increased to $13.9m (H1 2019: $14.3m). The tax credit reflects the impact of the loss before tax in the period.

 

Cruise Ports Business Review

As stated above, 2020 was the year that the strategy we set at the IPO was expected to start to really deliver operational and financial results. By the end of Q1, this expectation was becoming reality, with cruise passenger volumes up 146% yoy and Cruise EBITDA up 61% at the end of March 2020. Unfortunately, the global outbreak of Covid-19 and the subsequent unprecedented disruption to both global economies and the global travel sector put the cruise sector into hibernation.

As of today, there have been only a few signs of cruising returning to our porst, with a small number of cruise ships now sailing very restricted itineraries. However, while there are plans for further ships to set sail over the remainder of 2020, the short term outlook remains uncertain.

However, looking into 2021 and beyond, it is very encouraging to see such strong booking trends across the cruise industry and across all regions. The major cruise lines have stated that booking trends for 2021 are strong and while the industry has seen some early retirement of older ships and small delays to new ship orders, the long term outlook for the cruise ship fleet remains positive.

It should come as no surprise to see our Cruise port operations so badly affected by the global shutdown in 2020. However, it is testament to our business model and our speed of response to the crisis that at the EBITDA level of our Cruise port business lost only $1.8m in Q2 2020, generating a H1 2020 EBITDA of $3.9m.

 

Overall in H1 2020 we welcomed 1.3m Cruise passengers, a 36% decline compared to the same period last year. With the strong first time contribution from our new ports in the Caribbean in Q1 2020 helping to offset the impact of the shutdown of the cruise industry in Q2 2020. At all ports including equity accounted associate ports La Goulette, Lisbon, Singapore and Venice we welcomed 1.6m passengers (H1 2019: 3.3m, FY 2019: 9.3m).

In the first half Cruise Revenue increased 41.9% to $33.9m vs H1 2019 $23.9m and Cruise Segmental EBITDA fell 76.9% to $3.9m (H1 2019: $16.8m). However, Cruise revenue was inflated by the accounting standard IFRIC-12, which resulted in $22.0m of capital expenditure at Nassau Cruise Port in Q2 having to be recognised as revenue. Excluding this impact Cruise Revenue in H1 2020 was $11.9m and Cruise Segmental EBITDA was $3.5m.

The most significant contributor to Cruise Segmental EBITDA was the first time underlying contribution of Nassau, which reported EBITDA of $2.8m in H1 2020. Elsewhere, with almost no passenger volumes in Q2 2020, Valletta and Ege performed better than most other ports in the period as a result of their non-passenger related retail revenue such as waterfront restaurants. 

Overall the pro-rata net income contribution from our equity accounted associate ports to Other Cruise EBITDA was $0.7m (H1 2019: $3.3m) during the period.

 

With the onset of the Covid-19 outbreak, the focus of our cruise operations quickly became cost cutting and cash preservation. GPH's business model is inherently flexible in its Cruise ports. The extensive use of outsourced serviced providers means that a high percentage of costs automatically expand and contract in line with cruise traffic.

Fixed costs were reduced through a range of measures including a significant reduction in employee costs through a reduced working week, salary deferrals, and suspension of board members' salaries and fees until 2021. Marketing costs, new port project costs and consultancy fees were significantly reduced. In addition, at a number of ports minimum concession fees have either been discounted or deferred. With the exception of the ports in Nassau and Antigua, all but essential maintenance capital expenditure has been suspended, yielding a significant saving.

The flexibility of this model has helped protect the business and preserve cash during the Covid-19 crisis and the reporting of $3.9m of Cruise Segmental EBITDA in H1 2020 and an EBITDA loss of just $1.8m in Q2 2020 is testament to the flexibility and strength of the business model in the face of a never seen before crisis.

 

While most of our cruise ports have been very quiet in Q2 2020, in the Caribbean, work has continued in transforming Nassau Cruise Port and Antigua Cruise Port. So far in 2020, $28.9m has been invested into Nassau Cruise Port and $9.1m has been invested into Antigua Cruise Port.

Phase two of the Nassau Cruise Port project is now underway, this phase will involve completing the marine works, which includes material purchases, an expansion of the berthing capacity of the port, and upgrades to existing infrastructure. In 2021, phase three will see the completion of the landside works, including the new arrivals terminal and plaza, Junkanoo Museum, retail Market Place, amphitheatre, and other food and beverage and entertainment spaces. The project will also see the port integrated into Bay Street with the expectation that it will serve as a catalyst for the wider development of downtown Nassau. Transforming not just Nassau Cruise Port into one of the iconic cruise destinations in the world but also transforming the experience for cruise passengers, locals and the cruise lines, while generating local jobs and driving economic growth.

In May 2020, Nassau Cruise Port successfully issued a 8.0% coupon $150m 2040 bond through a private offering. The success of this issue, underpins the strength and attractions not only of this project but of the continued long term attractions of the global cruise industry.

In Antigua, significant progress has been made in the period on the work to complete the new pier. Once complete the pier will be capable of berthing the largest cruise ships in the world, acting as a key enabler of passenger volume growth over the medium term. Completion of the new pier is targeted for Q42020.

In addition to the continued investment in the Caribbean in H1 2020, the footprint of GPH's cruise port portfolio increased when its joint venture with MSC Cruises S.A., announced it had completed the acquisition of Goulette Shipping Cruise, the company that operates the cruise terminal in La Goulette, Tunisia. The concession to operate the cruise port was awarded to Goulette Shipping Cruise in 2006 on a 30-year basis, with a right to extend the term for an additional 20 years.

In addition, GPH increased its effective ownership of Malaga Cruise Port to 62% from 49.6%, when Creuers Del Port de Barcelona SA ("Creuers") completed the purchase of Autoridad Portuaria de Malagas's (Malaga Port Authority) 20.0% holding in the Malaga cruise port concession for €1.5m. This transaction is in line with GPH's strategy to buy out, at fair value, minority shareholdings where possible and appropriate to do so.       

Commercial Ports Business Review

Our Commercial ports business has proven to be resilient in the first half of 2020, despite the turmoil caused to the global economy from the Covid-19 crisis. While our commercial ports are never immune to macro-economic factors, the performance has nevertheless been pleasing given the prevalent conditions.

The performance from Port Akdeniz has been far stronger than the severe downside scenario outlined at the time of the full year results on the 14 April 2020. A key element of this scenario was marble volumes at Port Akdeniz falling by 75% between May to September 2020 when compared to management expectations. In Q2 2020 Container Throughput volumes actually rose 1.5% QoQ, while marble volumes were up QoQ, performing significantly better than the severe downside assumption, albeit below our original expectations at the beginning of the year.

Commercial	H1 2020	H1 2020 CCY6	H1 2019	YoY Growth (%)	YoY CCY Growth (%)
Revenue ($m)	20.3	20.4	30.8	-33.9%	-33.6%
Segmental EBITDA ($m)	12.9	13.0	22.3	-41.9%	-41.8%
Segmental EBITDA Margin	63.6%	63.5%	74.9%
General & Bulk Cargo ('000)	583.0		458.0	27.3%
Throughput ('000 TEU)	90.9		105.6	-13.8%
Yield (USD, Revenue per tonnes)	5.4		7.5	-27.8%
Yield (USD, Revenue per TEU)	168.1		163.0	-3.0%

Our Commercial port operations delivered a decline in revenue of 33.9% to $20.3m (H1 2019: $30.8m). While Commercial EBITDA fell by 41.9% to $12.9m (H1 2019: $22.3m). Excluding the impact of the oil services contract in 2019, Commercial revenue and EBITDA fell 19.1% and 25.9% respectively.

Overall Container Throughout volumes declined by 13.8% in H1 2020, with Q2 volumes actually delivering growth of 10.6% QoQ, despite the onset of the Covid-19 crisis. While General & Bulk Cargo volumes were strong, rising by 27.3% in the period. This growth was driven by the continued impact of a new volume focussed pricing structure at Port Akdeniz.

In terms of yields, total throughput container yields were down 3.0%, while cargo yields were down 27.8%. With this drop in cargo yields primarily the result of the volume related pricing initiative at Port Akdeniz in the period.

Port Akdeniz	H1 2020	H1 2020 CCY6	H1 2019	YoY Growth (%)	YoY CCY Growth (%)
Revenue ($m)	16.7	16.7	26.3	-36.5%	-36.5%
Segmental EBITDA ($m)	11.9	11.9	20.7	-42.6%	-42.6%
Segmental EBITDA Margin	71.1%	78.7%	78.7%
General & Bulk Cargo ('000)	555.4		335.3	65.7%
Throughput ('000 TEU)	63.2		79.7	-20.7%
Yield (USD, Revenue per tonnes)	186.6		188.1	-0.8%
Yield (USD, Revenue per TEU)	4.7		6.4	-27.3%

Port Akdeniz, our largest commercial port, reported a revenue decline of 36.5% to $16.7m (H1 2019: $26.3m), with EBITDA declining 42.6% to $11.9m (H1 2019: $20.7m), with the EBITDA margin falling to 71.1%. Excluding the impact of the oil services contract in 2019, Port Akdeniz Revenue fell 19.3% and EBITDA fell 25.3%.

The success of the new pricing strategy led to General & Bulk Cargo volumes rising strongly, increasing by 65.7%, with the increase in Q2 moderating from the 86.0% increase in Q1. Throughput container volumes fell by 20.7% in H1 2020, with Q2 volumes following a similar trend to Q1. Container Throughout yields were broadly unchanged, while General & Bulk cargo yields reduced as part of our volume based pricing strategy.

Looking into H2 2020, despite the Covid-19 crisis, we expect our Commercial ports to improve compared to H1 2020.

On 11 March 2020 GPH announced that following a competitive sales process it had entered exclusive negotiations with a potential buyer of Port Akdeniz. Negotiations continue to progress positively but a final outcome on the sale process has not yet been achieved. There can be no certainty as to the timing or that the terms of a sale will be agreed. A further announcement will be made when it is appropriate to do so.

Port Adria	H1 2020	H1 2020 CCY6	H1 2019	YoY Growth (%)	YoY CCY Growth (%)
Revenue ($m)	3.6	3.7	4.5	-18.7%	-16.6%
Segmental EBITDA ($m)	1.1	1.1	1.6	-32.0%	-30.4%
Segmental EBITDA Margin	29.3%	29.3%	35.0%
General & Bulk Cargo ('000)	27.6		122.7	-77.5%
Throughput ('000 TEU)	27.7		25.9	7.2%
Yield (USD, Revenue per tonnes)	109.5		106.6	2.7%
Yield (USD, Revenue per TEU)	17.9		9.1	96.8%

At Port of Adria, Revenue fell 18.7% to $3.6m (H1 2019: $4.5m), while EBITDA fell $0.5m or 32.0% to $1.1m (H1 2019: $1.6m). General & Bulk Cargo volumes fell 77.5% in the period, driven primarily by a sharp drop in steel coils volumes. While Throughput container volumes rose 7.2%. 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 cargos at the port.

Financial Overview

Loss after tax for the period of $34.9 million (H1 2019: $15.8m) is driven by an increase in net finance costs to $23.0m (H1 2019: $18.4m), lower contribution from equity accounted associates of $0.7m (H1 2019: $3.3m), while there was a tax credit of $7.1m compared to a tax expense of $1.9m in H1 2019.

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 to $15.5m (H1 2019: $12.7m). The tax credit reflects reflect the impact of the loss before tax in the period.

The tax credit reflects the impact of reporting an operating loss, driven by the significantly lower taxable profit contribution from cruise operations and lower taxable profits from commercial ports.

Specific Adjusting Items in Operating Profit

As of 30 June 2020, specific adjusting items totalled $5.4m (H1 2019: $6.5m), comprising project expenses amounting to $4.5m (H1 2019: $4.7m) which were mostly incurred in the first four months of the year, provisions $0.1m (H1 2019: $1.2m) and other specific adjustment items $0.8m (H1 2019: $0.6m) 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 $23.9m, an increase on the $18.4m charge in H1 2019. This increase was 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 $34.9m (H1 2019: $28.9m), primarily due to non-cash foreign exchange loss of $17.2m (H1 2019: $13.1m), interest expenses on loans and borrowings increased slightly to $13.4m (H1 2019: $12.7m) and interest expenses on lease obligations increased to $2.2m (H1 2019: $1.7m).

Finance income increased to $11.0m (H1 2019: $10.5m), primarily as a result in an increase in in the non-cash foreign exchange gains on Turkish entities' Turkish Lira costs base to $16.2m (H1 2019: $16.2m).

Taxation

Global Ports Holding is a multinational group and as such is liable for taxation in multiple jurisdictions around the world. The Group's incurred a tax credit for the period of $7.1m, compared to a tax expense of $1.9m in H1 2019.

The tax credit compared with prior years is primarily the result of reporting an operating loss in the period, driven by the significantly lower taxable profit contribution from cruise operations and lower taxable profits from commercial ports.

Earnings Per Share

The Group's basic earnings per share was -46.2.5c (H1 2019: -26.0c), this decrease is in line with the decline in profit for the year attributable to owners of the company -$29.1m (H1 2019: -$16.3m). Adjusted earnings per share of          -5.6c (H1 2019: 9.5c), 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, non-cash provisional income and expenses, non-cash foreign exchange transactions and specific non-recurring expenses and income.

Cash Flow and Investment

Operating cash flow was $16.6m (H1 2019: -$1.3m). The improvement in operating cash flow was driven by a working capital movement that resulted in a positive cash flow of $8.8m in the period, primarily as a result of the unwind in trade and other receivables in the absence of cruise calls in Q2 2020 and following the peak cruise season in the Caribbean.

Capital expenditure during the period was $43.9m, a significant increase on the $5.7m incurred in H1 2019. $38.0m was spent on the Caribbean ports in Antigua and Nassau. $3.4m was spent across the rest of the cruise portfolio, with $1.9m spent in Barcelona on terminal improvements and $1.4m in Valletta on investment into the waterfront infrastructure. While $2.5m was spent on the Commercial ports, with the vast majority spent at Port Akdeniz.

Balance Sheet

Gross debt at period end was $559.2m (31st December 2019: $410.0m), with this increase driven largely by the issuing of the $150m Nassau Cruise Port bond in the period. At 30th June 2019 net debt was $436.9m (31st December 2019: $389.2m). The Group's Net Debt/Adjusted EBITDA ratio was 7.8x times as at 30th June 2020 (31st December 2019: 4.3x). Excluding IFRS 16 impact net debt was $372.6m (31st December 2019: $324.3m) and the Net Debt/Adjusted EBITDA ratio was 6.7x.

The Leverage Ratio as per GPH's Eurobond was 6.7x at 30th June 2020 (31st December 2019: 4.2x), vs an incurrence covenant of 5.0x, the leverage ratio excludes the IFRS 16 impact, in line with the bond terms.

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

On the 14 April the board announced that in light of the unprecedented level of disruption to global trade and the cruise industry and the associated uncertainty, the Board of GPH decided that it was prudent and in the best interests of all stakeholders to temporarily suspend the dividend for full year 2019, until the situation becomes clearer.

Clearly significant uncertainty remains and the group has experienced a significant drop in trading since the onset of the Covid-19 crisis. It is therefore in the best interests of all stakeholders that the dividend remains suspended for at least financial year 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Ports Holding PLC

 

Interim condensed consolidated financial statements

 

For the six months ended 30 June 2020

 

 

 

 

 

 

 

 

 

 

 

 

Contents

 

Responsibility Statement	15
Primary Statements
Interim condensed consolidated statement of profit or loss and other comprehensive income	16 - 17
Interim condensed consolidated statement of financial position	18
Interim condensed consolidated statement of changes in equity	19 - 21
Interim condensed consolidated cash flow statement	22
Notes to the condensed financial statements	23 - 46

 

 

 

 

 

 

 

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:

 

 

1. 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

 

2. 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 2020

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The notes on pages 23 to 46 are an integral part of these condensed consolidated interim financial statements

 

 

	Notes		As at  30 June 2020 (USD '000) (Unaudited)		As at 31 December 2019 (USD '000) (Audited)		As at  30 June 2019 (USD '000) (Unaudited)
Non-current assets
Property and equipment			139,304		130,511		128,150
Intangible assets			435,341		424,618		374,759
Right of Use Assets			80,252		81,123		59,658
Investment property			2,127		2,139		--
Goodwill			13,485		13,485		13,485
Equity-accounted investees			27,195		26,637		26,524
Due from related parties	14		7,338		6,811		--
Other investments			3		4		12,617
Deferred tax assets			3,223		2,179		2,635
Other non-current assets			4,253		4,573		4,591
			712,521		692,080		622,419
Current assets
Trade and other receivables	8		17,596		31,022		42,916
Due from related parties	14		372		771		1,057
Other investments			54		71		72
Other current assets			9,120		3,916		4,315
Inventory			1,376		1,393		1,468
Prepaid taxes			1,937		1,846		24
Cash and cash equivalents			122,264		63,780		58,795
			152,719		102,799		108,647
Total assets			865,240		794,879		731,066
Current liabilities Loans and borrowings	10		78,950		62,691		58,295
Other financial liabilities			2,098		4,536		--
Trade and other payables			23,535		21,367		17,785
Due to related parties	14		662		1,317		504
Dividends payable	9		--		--		16,821
Current tax liabilities			2,715		2,725		2,911
Provisions	11		6,829		2,043		1,974
			114,789		94,679		98,290
Non-current liabilities
Loans and borrowings	10		480,247		390,299		351,654
Other financial liabilities			50,287		50,394		2,088
Derivative financial liabilities	15		415		485		669
Deferred tax liabilities			78,090		84,715		89,582
Provisions	11		15,306		18,175		7,388
Employee benefits			911		869		836
			625,256		544,937		452,217
Total liabilities			740,045		639,616		550,507
Net assets			125,195		155,263		180,559
Equity
Share capital			811		811		811
Legal reserves			11,806		13,144		13,038
Share based payment reserves			239		239		275
Hedging reserves			(248,112)		(220,029)		(213,618)
Translation reserves			248,490		213,715		214,918
Retained earnings			32,538		61,053		75,845
Equity attributable to equity holders of the Company			45,772		68,933		91,269
Non-controlling interests			79,423		86,330		89,290
Total equity			125,195		155,263		180,559

 

 

 

 

 

 

 

The notes on pages 23 to 46 are an integral part of these condensed consolidated interim financial statements

 

(USD '000)	Notes	Share capital	Legal  reserves	Share based payment reserves	Hedging reserves	Translation reserves	Retained earnings	Total	Non-controlling interests	Total equity
Balance at 1 January 2020 (Audited)		811	13,144	239	(220,029)	213,715	61,053	68,933	86,330	155,263
Loss for the year		--	--	--	--	--	(29,911)	(29,911)	(5,186)	(35,097)
Other comprehensive (loss) / income for the year		--	--	--	(28,083)	34,775	(88)	6,604	227	6,831
Total comprehensive (loss) / income for the year		--	--	--	(28,083)	34,775	(29,999)	(23,307)	(4,959)	(28,266)
Transactions with owners of the Company
Transactions with non-controlling interest	4 (b)	--	--	--	--	--	--	--	142	142
Transfer to legal reserves		--	(1,338)	--	--	--	1,338	--	--	--
Dividends	9	--	--	--	--	--	--	--	(237)	(237)
Total contributions and distributions		--	(1,338)	--	--	--	1,338	--	(95)	(95)
Changes in ownership interest
Acquisition of minority shareholding	4 (a)	--	--	--	--	--	146	146	(1,853)	(1,707)
Total changes in ownership interest		--	--	--	--	--	146	146	(1,853)	(1,707)
Total transactions with owners of the Company		--	(1,338)	--	(28,083)	34,775	(28,515)	(23,161)	(6,907)	(30,068)
Balance at 30 June 2020 (Unaudited)		811	11,806	239	(248,112)	248,490	32,538	45,772	79,423	125,195

 

 

 

 

 

 

 

 

 

 

 

The notes on pages 23 to 46 are an integral part of these condensed consolidated interim financial statements

(USD '000)	Notes	Share capital	Legal  reserves	Share based payment reserves	Hedging reserves	Translation reserves	Retained earnings	Total	Non-controlling interests	Total equity
Balance at 1 January 2019 (Audited)		811	13,030	--	(195,393)	197,247	108,981	124,676	91,045	215,721
Adjustment on initial application of IFRS 16 (net of tax) (*)		--	--	--	--	--	--	--	--	--
Adjusted balance at 1 January 2019		811	13,030	--	(195,393)	197,247	108,981	124,676	91,045	215,721
Loss for the year		--	--	--	--	--	(16,317)	(16,317)	557	(15,760)
Other comprehensive (loss) / income for the year		--	--	--	(18,225)	17,671	10	(544)	(461)	(1,005)
Total comprehensive (loss) / income for the year		--	--	--	(18,225)	17,671	(16,307)	(16,861)	96	(16,765)
Transactions with owners of the Company
Transactions with non-controlling interest		--	--	--	--	--	--	--	--	--
Transfer to legal reserves		--	8	--	--	--	(8)	--	--	--
Equity settled share-based payment expenses		--	--	275	--	--	--	275	--	275
Dividends		--	--	--	--	--	(16,821)	(16,821)	(1,851)	(18,672)
Total contributions and distributions		--	8	275	--	--	(16,829)	(16,546)	(1,851)	(18,397)
Total transactions with owners of the Company		--	8	275	(18,225)	17,671	(33,136)	(33,407)	(1,755)	(35,162)
Balance at 30 June 2019 (Unaudited)		811	13,038	275	(213,618)	214,918	75,845	91,269	89,290	180,559

 

 

 

 

 

 

The notes on pages 23 to 46 are an integral part of these condensed consolidated interim financial statements

(USD '000)	Notes	Share capital	Legal reserves	Share based payment reserves	Hedging reserves	Translation reserves	Retained earnings	Total	Non-controlling interests	Total equity
Balance at 1 January 2019		811	13,030	--	(195,393)	197,247	108,981	124,676	91,045	215,721
Adjustment on initial application of IFRS 16 (net of tax) (*)		--	--	--	--	--	--	--	--	--
Adjusted balance at 1 January 2019		811	13,030	--	(195,393)	197,247	108,981	124,676	91,045	215,721
(Loss) / income for the year		--	--	--	--	--	(18,558)	(18,558)	3,339	(15,219)
Other comprehensive (loss) / income for the year		--	--	--	(24,636)	16,468	(31)	(8,199)	(1,694)	(9,893)
Total comprehensive (loss) / income for the year		--	--	--	(24,636)	16,468	(18,589)	(26,757)	1,645	(25,112)
Transactions with owners of the Company
Transactions with non-controlling interest		--	--	--	--	--	--	--	6	6
Transfer to legal reserves		--	114	--	--	--	(114)	--	--	--
Equity settled share-based payment expenses		--	--	239	--	--	--	239	--	239
Dividends	9	--	--	--	--	--	(29,225)	(29,225)	(6,366)	(35,591)
Total contributions and distributions		--	114	239	--	--	(29,339)	(28,986)	(6,360)	(35,346)
Total transactions with owners of the Company		--	114	239	(24,636)	16,468	(47,928)	(55,743)	(4,715)	(60,458)
Balance at 31 December 2019		811	13,144	239	(220,029)	213,715	61,053	68,933	86,330	155,263

(*) 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 (if any) is recognized in retained earnings at the date of initial application.

 

 

 

 

The notes on pages 23 to 46 are an integral part of these condensed consolidated interim financial statements

	Notes	Six months ended 30 June 2020 (USD '000) (Unaudited)	Six months ended 30 June 2019 (USD '000) (Unaudited)	Year ended 31 December 2019 (USD '000) (Audited)
Cash flows from operating activities
Loss for the period / year		(35,097)	(15,760)	(15,219)
Adjustments for:
Depreciation of PPE and RoU assets and amortization expense		27,043	23,302	47,737
Share of profit of equity-accounted investees, net of tax		(653)	(3,320)	(5,580)
Gain on disposal of property plant and equipment		--	(17)	(17)
Finance costs (excluding foreign exchange differences)	7	16,511	15,016	30,571
Finance income (excluding foreign exchange differences)	7	(82)	(871)	(2,017)
Foreign exchange differences on finance costs and income, net	7	7,452	4,294	5,697
Income tax expense		(7,738)	1,931	1,855
Employment termination indemnity reserve		107	72	139
Equity settled share-based payment expenses		--	275	239
(Charges to) / reversal of provision		239	1,316	1,676
Operating cash flow before changes in operating assets and liabilities		7,782	26,238	65,081
Changes in:
- trade and other receivables		13,426	(22,917)	(11,023)
- other current assets		(5,276)	426	(1,003)
- related party receivables		(231)	(30)	(6,555)
- other non-current assets		320	128	346
- trade and other payables		(508)	(79)	(11,849)
- related party payables		(552)	(38)	775
- provisions		1,614	(1,821)	(31)
Post-employment benefits paid		(1)	(21)	8,573
Cash generated by operations before benefit and tax payments		16,574	27,213	1,886
Income taxes paid		(253)	(3,137)	(7,195)
Net cash generated from operating activities		16,321	(1,251)	37,119
Investing activities
Acquisition of property and equipment		(14,811)	(5,589)	(15,813)
Acquisition of intangible assets		(29,121)	(69)	(8,155)
Acquisition of a lease asset		--	--	(21,000)
Proceeds from sale of property and equipment		--	22	35
Bond and short-term investment income		--	--	--
Bank interest received		82	140	251
Dividends from equity accounted investees		--	2,849	2,849
Proceeds from sale of other investments in FVTPL instruments		--	--	13,184
Investment in equity accounted investee		--	--	(61)
Acquisition / Incorporation of subsidiary	4 (a)	(1,707)	--	(5)
Other investment in FVTPL instruments		--	--	--
Advances given for tangible assets		--	(172)	(292)
Net cash used in investing activities		(45,557)	(2,819)	(29,007)
Financing activities
Equity injection by minorities to subsidiaries	4 (b)	142	--	7
Dividends paid to equity owners	9	--	--	(29,225)
Dividends paid to NCIs	9	(237)	(538)	(5,062)
Interest paid		(14,779)	(12,574)	(26,388)
Proceeds from borrowings		130,683	19,250	74,918
Repayments of borrowings		(24,081)	(13,224)	(31,949)
Repayments of lese liabilities (2018: payment of finance lease liabilities)		(1,843)	(2,433)	(3,066)
Net cash used in financing activities		89,885	(9,519)	(20,765)
Net (decrease) / increase in cash and cash equivalents		60,649	(13,589)	(12,653)
Effect of foreign exchange rate changes on cash and cash equivalents		(2,165)	(7,445)	(3,396)
Cash and cash equivalents at beginning of year		63,780	79,829	79,829
Cash and cash equivalents at end of year		122,264	58,795	63,780

 

 The notes on pages 23 to 46 are an integral part of these condensed consolidated interim financial statements