Global Ports Holding Plc

Interim results for the six months ended 30 September 2021

Global Ports Holding Plc ("GPH" or "Group"), the world's largest independent cruise port operator, today announces its financial results for the six months ended 30 September 2021.

 

On the 10 November 2021 GPH issued a trading update for the period from 1 April to 30 September 2021. Today's statement provides the financial statements that support this previously issued trading update.

 

 

 

 

 

 

 

 

 

 

 

CONTACT
For investor, analyst and financial media enquiries:
Investor Relations
Martin Brown
Telephone: +44 (0) 7947 163 687
Email: [email protected]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Ports Holding PLC

 

Interim condensed consolidated financial statements

 

For the six months ended 30 September 2021

 

 

 

 

 

 

 

 

 

 

 

 

Contents

 

Responsibility Statement	3
Primary Statements
Interim condensed consolidated statement of profit or loss and other comprehensive income	4 - 5
Interim condensed consolidated statement of financial position	6
Interim condensed consolidated statement of changes in equity	7 - 9
Interim condensed consolidated cash flow statement	10
Notes to the condensed financial statements	11 - 35

 

 

 

 

 

 

 

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 United Kingdom,

 

• 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,

 

 

 

 

 

Ercan ERGÜL

Board Member

31 January 2022

 

 

 

 

* Comparative information has been re‑presented due to a discontinued operation and change in financial year. See Note 2a.

 

 

 

 

 

 

 

 

 

 

 

 

 

The notes on pages 11 to 35 are an integral part of these condensed consolidated interim financial statements

 

 

* Comparative information has been re‑presented due to a discontinued operation and change in financial year. See Note 2a.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The notes on pages 11 to 35 are an integral part of these condensed consolidated interim financial statements

	Notes		As at  30 September 2021 (USD '000) (Unaudited)		As at 31 March 2021 (USD '000) (Audited)		As at  30 September 2020 (USD '000) (Unaudited)
Non-current assets
Property and equipment			127,447		126,858		145,129
Intangible assets	9		376,226		331,910		458,548
Right of Use Assets			86,356		87,469		80,774
Investment property			2,158		2,198		2,211
Goodwill			13,485		13,485		14,223
Equity-accounted investees			16,535		18,776		26,893
Due from related parties	16		8,049		8,125		7,673
Deferred tax assets			15,677		11,137		3,991
Other non-current assets			2,346		2,638		4,406
			648,279		602,596		743,848
Current assets
Trade and other receivables	10		28,253		26,162		16,915
Due from related parties	16		460		324		796
Other investments			57		63		78
Other current assets			38,382		12,371		5,382
Inventory			946		903		1,545
Prepaid taxes			273		238		1,958
Cash and cash equivalents			82,616		170,599		108,854
			150,987		210,660		135,528
Total assets			799,266		813,256		879,376
Current liabilities Loans and borrowings	12		61,351		295,200		80,773
Other financial liabilities			1,176		2,925		2,124
Trade and other payables			58,066		39,236		23,227
Due to related parties	16		3,338		1,253		696
Current tax liabilities			61		157		2,038
Provisions	13		8,691		7,640		3,487
			132,683		346,411		112,345
Non-current liabilities
Loans and borrowings	12		483,464		253,734		494,354
Other financial liabilities			53,753		55,249		49,895
Trade and other payables			11		12		--
Derivative financial liabilities	17		230		399		443
Deferred tax liabilities			48,212		49,323		77,951
Provisions	13		19,414		21,221		18,944
Employee benefits			482		344		848
			605,566		380,282		642,435
Total liabilities			738,249		726,693		754,780
Net assets			61,017		86,563		124,596
Equity
Share capital			811		811		811
Legal reserves			6,014		6,014		11,819
Share based payment reserves			239		239		239
Hedging reserves			(43,515)		(41,951)		(276,065)
Translation reserves			58,488		58,779		285,210
Retained earnings			(30,990)		(12,151)		21,067
Equity attributable to equity holders of the Company			(8,953)		11,741		43,081
Non-controlling interests			69,970		74,822		81,515
Total equity			61,017		86,563		124,596

 

 

 

 

 

 

 

The notes on pages 11 to 35 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 April 2021 (Audited)		811	6,014	239	(41,951)	58,779	(12,151)	11,741	74,822	86,563
Loss for the year		--	--	--	--	--	(18,844)	(18,844)	(4,457)	(23,301)
Other comprehensive (loss) / income for the year		--	--	--	(1,564)	(291)	5	(1,850)	(395)	(2,245)
Total comprehensive (loss) / income for the year		--	--	--	(1,564)	(291)	(18,839)	(20,694)	(4,852)	(25,546)
Transactions with owners of the Company
Contribution and distributions
Dividends		--	--	--	--	--	--	--	--	--
Transfer to legal reserves		--	--	--	--	--	--	--	--	--
Total contributions and distributions		--	--	--	--	--	--	--	--	--
Changes in ownership interest
Equity injection		--	--	--	--	--	--	--	--	--
Acquisition of subsidiary with non-controlling interest		--	--	--	--	--	--	--	--	--
Transactions with non-controlling interest		--	--	--	--	--	--	--	--	--
Total changes in ownership interest		--	--	--	--	--	--	--
Total transactions with owners of the Company		--	--	--	(1,564)	(291)	(18,839)	(20,694)	(4,852)	(25,546)
Balance at 30 September 2021 (Unaudited)		811	6,014	239	(43,515)	58,488	(30,990)	(8,953)	69,970	61,017

 

 

 

 

 

 

 

The notes on pages 11 to 35 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		--	--	--	--	--	(41,302)	(41,302)	(6,396)	(47,698)
Other comprehensive (loss) / income for the year		--	--	--	(56,036)	71,495	(105)	15,354	2,894	18,248
Total comprehensive (loss) / income for the year		--	--	--	(56,036)	71,495	(41,407)	(25,948)	(3,502)	(29,450)
Transactions with owners of the Company
Contribution and distributions
Dividends		--	--	--	--	--	--	--	(237)	(237)
Transfer to legal reserves		--	(1,325)	--	--	--	1,325	--	--	--
Total contributions and distributions		--	(1,325)	--	--	--	1,325	--	(237)	(237)
Changes in ownership interest
Equity injection	4b	--	--	--	--	--	--	--	326	326
Acquisition of subsidiary with non-controlling interest		--	--	--	--	--	--	--	399	399
Transactions with non-controlling interest	4a	--	--	--	--	--	96	96	(1,801)	(1,705)
Total changes in ownership interest		--	--	--	--	--	96	96	(1,076)	(980)
Total transactions with owners of the Company		--	(1,325)	--	--	--	1,421	96	(1,313)	(1,217)
Balance at 30 September 2020 (Unaudited)		811	11,819	239	(276,065)	285,210	21,067	43,081	81,515	124,596

 

 

 

 

The notes on pages 11 to 35 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		811	13,144	239	(220,029)	213,715	61,053	68,933	86,330	155,263
(Loss) / income for the year		--	--	--	--	--	(80,313)	(80,313)	(14,376)	(94,689)
Other comprehensive (loss) / income for the year		--	--	--	(45,856)	61,299	(117)	15,326	3,715	19,041
Total comprehensive (loss) / income for the year		--	--	--	(45,856)	61,299	(80,430)	(64,987)	(10,661)	(75,648)
Transactions with owners of the Company
Contribution and distributions
Transfer to legal reserves		--	(1,276)	--	--	--	1,276	--	--	--
Dividends		--	--	--	--	--	--	--	(237)	(237)
Total contributions and distributions		--	(1,276)	--	--	--	1,276	--	(237)	(237)
Changes in ownership interest
Equity injection	4b	--	--	--	--	--	--	--	483	483
Acquisition of minority shareholding	4a	--	--	--	--	--	96	96	(1,801)	(1,705)
Acquisition of subsidiary with non-controlling interest		--	--	--	--	--	--	--	708	708
Disposal of subsidiary	5	--	(5,854)	--	223,934	(216,235)	5,854	7,699	--	7,699
Total changes in ownership interest		--	(5,854)	--	223,934	(216,235)	5,950	7,795	(610)	7,185
Total transactions with owners of the Company		--	(7,130)	--	223,934	(216,235)	7,226	7,795	(847)	6,948
Balance at 31 March 2021 (audited)		811	6,014	239	(41,951)	58,779	(12,151)	11,741	74,822	86,563

 

 

 

The notes on pages 11 to 35 are an integral part of these condensed consolidated interim financial statements

	Notes	Six months ended 30 September 2021 (USD '000) (Unaudited)	Six months ended 30 September 2020 (USD '000) (Unaudited) (*)	15 Month ended 31 March 2021 (USD '000) (Audited)
Cash flows from operating activities
Loss for the period / year		(23,301)	(31,152)	(94,689)
Adjustments for:
Depreciation of PPE and RoU assets and amortization expense		14,420	22,619	34,209
Impairment losses on intangible / tangible assets		--	--	3,941
Impairment losses on investments		--	--	8,410
Share of profit of equity-accounted investees, net of tax		343	(337)	(465)
Gain on sale of discontinued operation, net of tax		--	--	(9,071)
Gain on disposal of property plant and equipment		--		--
Finance costs (excluding foreign exchange differences)	7	16,915	15,238	36,867
Finance income (excluding foreign exchange differences)	7	(482)	1,068	(626)
Foreign exchange differences on finance costs and income, net	7	(1,076)	3,408	14,526
Income tax expense		(5,909)	(8,282)	(15,417)
Employment termination indemnity reserve		26	54	50
(Charges to) / reversal of provision		(744)	(114)	7,739
Operating cash flow before changes in operating assets and liabilities		192	2,502	(14,526)
Changes in:
- trade and other receivables		(2,091)	12,192	5,922
- other current assets		(26,089)	824	3,480
- related party receivables		282	(1,821)	(397)
- other non-current assets		293	(178)	2,508
- trade and other payables		13,736	5,515	14,386
- related party payables		2,086	(610)	(65)
- provisions		--	(4,336)	(32)
Post-employment benefits paid		(1)	(27)	(1,350)
Cash generated by operations before benefit and tax payments		(11,592)	14,061	1,886
Income taxes paid		(173)	(833)	(442)
Net cash generated from operating activities		(11,765)	13,228	9,484
Cash inflows from operating activities on discontinued operations		--	--	27,163
Investing activities
Acquisition of property and equipment		(3,895)	(11,879)	(27,913)
Acquisition of intangible assets		(46,392)	(44,170)	(56,557)
Proceeds from sale of property and equipment		3	203	392
Disposal of discontinued operation, net of cash disposed of	5	--	--	99,943
Bank interest received		140	60	153
Dividends from equity accounted investees		1,647	--	1,647
Investment in equity accounted investee		--	--	(570)
Acquisition of subsidiary, net of cash acquired		--	(1,109)	(2,816)
Advances given for tangible assets		--	267	(9,668)
Net cash used in investing activities		(48,497)	(56,628)	4,611
Cash used in investing activities of discontinued operations		--	--	(1,560)
Financing activities
Equity injection by minorities to subsidiaries		--	183	482
Dividends paid to NCIs		--	(237)	(237)
Interest paid		(30,754)	(14,417)	(31,545)
Proceeds from loans and borrowings		269,081	129,488	161,096
Repayments of borrowings		(263,104)	(19,268)	(52,318)
Repayments of lease liabilities		(798)	(1,325)	(3,922)
Net cash used in financing activities		(25,575)	94,424	73,556
Cash used in financing activities of discontinued operations		--	--	(1,167)
Net (decrease) / increase in cash and cash equivalents		(85,837)	51,024	112,087
Effect of foreign exchange rate changes on cash and cash equivalents		(2,146)	1,878	(5,268)
Cash and cash equivalents at beginning of year		170,599	55,952	63,780
Cash and cash equivalents at end of period		82,616	108,854	170,599

* Comparative information has not been restated for the disposal and includes the full impact of the discontinued operation; however it does reflect the change in financial year. See Note 2a.

 

 

 

 

 The notes on pages 11 to 35 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.

 

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 September 2021 were authorised for issue in accordance with a resolution of the directors on 31st January 2022.

 

2. Accounting policies

 

1. 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 United Kingdom 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 March 2021 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.

 

Management decided to change financial year of the Group to start from April 1st (first applied to the annual financial statements 2021, which ended 31st March 2021) to eliminate periodicity of the operations. With the change in financial year, Group will present its yearly operations covering business season in Europe (from early April until late October) and business season in Americas (Early October until late March). Accordingly, comparative information in the statement of profit or loss and OCI and cash flow statement were reclassified for consistency.

 

The financial information contained in this report for the six months ended 30 September 2020 and 30 September 2021 is unaudited. These interim financial statements were authorized for issue by the Company's board of directors on 31st January 2022.

 

The comparative figures for the 15 months ended 31 March 2021 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.

 

2. Going concern

 

The Group operates 20 ports in 14 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.

 

Cruise Port results turned positive in second quarter of the year reaching 30% of passenger numbers realized in the same period of 2019. The recovery seen during calendar Q2-2022 (second quarter of this report) is continued in calendar Q3-2022 and into calendar year 2022. Each month more cruise ships are being added back into service. At the same time the seasons impact the business volumes with the Mediterranean region ending its season around October/November and the Caribbean main season just starting at this time. The number of ship calls has reached around 66-72% compared to 2019 and slightly in excess of 40% on a passenger basis vs. 2019, indicating 60-70% occupancy ratios on the cruise ships on average during third quarter of financial year 2022. This is in line with the announcements of the cruise lines that about 70-75% of the ships are back in service; it was announced by cruise lines that all ships will return to service by mid-2022.

2 Accounting Policies (continued)

 

b) Going concern (continued)

 

In line with this expectation, and recovery impact on number of calls, management expected passenger numbers will increase up to 50% of 2019 realizations by year-end. With this additional performance of a positive Adjusted EBITDA in Q3-2022 on top of second quarter YTD performance, management expected slightly positive consolidated Adjusted EBITDA for the calendar year 2021. This recovery is expected to increase gradually until Q2 of financial year 2023 (June to September 2022) and by Q3-2023, management expected operations to reach its normalized, pre-Covid level and the return of regular business cycle.

 

The directors believe that the Group is well placed to manage its financing and other business risks satisfactorily and have a reasonable expectation that the Group will have adequate resources to continue in operation for at least 12 months from the signing date of these consolidated financial statements. They therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

 

3. 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.

 

In preparing these condensed consolidated interim financial information, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty, except as described below, were the same as those that applied to the consolidated financial statements as at and for the year ended 31 March 2021.

 

Impairment review of cash generating units (CGUs)

 

IFRS requires management to perform impairment tests annually for goodwill and, for finite lived assets, if events or changes in circumstances indicate that their carrying amounts may not be recoverable.

 

Impairment testing requires management to judge whether the carrying value of Assets and the associated goodwill of CGU can be supported by the net present value of future cash flows it generates. Calculating the net present value of the future cash flows requires estimates to be made in respect of highly uncertain matters including management's expectations of:

 

- Operational growth expectations including the forecast number of calls, passengers and container volumes,

- appropriate discount rates to reflect the risks involved

 

Management prepared formal forecasts for cruise port and commercial port operation for their remaining concession period, which are used to estimate their Value In Use ("VIU"). VIU calculations require subjective judgements based on a wide range of variables at a point in time including future passenger numbers or commercial volumes. Any significant decrease in variables used for value in use calculation is assessed as an impairment indicator. Due to the adverse impact of the Covid-19 pandemic on the Group's trade, an indicator of impairment has been identified for all cruise ports within the Group.  For Nassau Cruise Port, the Group estimates the recoverable amount using a fair value less costs to sell method, using a level 3 valuation technique based on forecast future cash flows. If the recoverable amount of an investment is estimated to be less than its carrying amount, the carrying amount of the investment is reduced to its recoverable amount and an impairment loss is recognised in the income statement. Each port represents a separate CGU.

 

 

2 Accounting Policies (continued)

 

c) Critical accounting judgements and key sources of estimation uncertainty (continued)

 

The Group uses the budget and long-range plan as approved by the board as the basis for the discounted cash flow models. The period over which cash flows have been projected is the length of the relevant concession agreement. The concession period has been used instead of 5 years (and a terminal value) as the concession length best represents the future use of the assets within the CGU. Management forecasted a recovery in following two years for number of passengers based on past experience on issues impacted Cruise industry (Costa Concordia case, 2008 global economic crisis), the publications made by Cruise Industry stakeholders, and the cash flows for following seven years with the remaining concession term having minimal estimated growth or industry growth. The key assumptions used in the estimation of the recoverable amount are set out below.

 

The resulting ViU of each CGU gives a recoverable amount higher than the carrying value of Asset and associated goodwill of CGU.

 

Changing the assumptions selected by management, in particular the discount rate and growth rate assumptions used in the cash flow projections, could significantly affect the Group's impairment evaluation and hence reported assets and profits or losses.

 

4. Change in / new accounting policies

 

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 15-months ended 31 March 2021. 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 March 2022.

 

5. 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.

 

 

 

2 Accounting Policies (continued)

 

e) Foreign currency (continued)

 

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 September 2021, 31 March 2021 and 30 September 2020, foreign currency exchange rates of the Central Bank of the Turkish Republic were as follows:

 

	30 September 2021	31 March 2021	30 September 2020
TL/USD	0.1131	0.1201	0.1281
Euro/USD	1.1663	1.1739	1.1691

 

For the six months ended 30 September 2021, 30 September 2020 and for the 15 months period ended 31 March 2021, average foreign currency exchange rates of the Central Bank of the Turkish Republic were as follows:

 

	Six months ended 30 September 2021	Six months ended 30 September 2020	15-months period ended 31 March 2021
TL/USD	0.1184	0.1422	0.1412
Euro/USD	1.1919	1.1367	1.1579

 

6. 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. 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 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 project specific development expenses as well as unallocated expenses, gives a more comparable year-on-year measure of port-level trading performance.

 

Management is using Segmental EBITDA for evaluating each port and group-level performances on operational level. As per management's view, some specific adjusting items included on the computation of Segmental EBITDA.

 

 

2 Accounting Policies (continued)

 

f) Alternative performance measures (continued)

 

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 income include project expenses; being the costs of specific M&A activities , the costs associated with appraising and securing new and potential future port agreements which should not be considered when assessing the underlying trading performance and the costs related to the refinancing of Group debts, the replacement provisions, being provision created for replacement of fixed assets which does not include regular maintenance, other provisions and reversals related to provisions provided, being related to unexpected non-operational transactions, impairment losses, construction accounting margin, being related to IFRIC 12 computation and main business of the Group is operating ports rather than construction, employee termination expenses, income from insurance repayments, income from scrap sales, gain/loss on sale of securities, other provision expenses, redundancy expenses and donations and grants.

 

Specific adjusting items comprised as following,

 

		Six months ended 30 September 2021 (USD '000) (Unaudited)		Six months ended 30 September 2020 (USD '000) (Unaudited)		15 months period ended 31 March 2021 (USD '000) (Audited)
Project expenses		4,520		2,135		11,098
Employee termination expenses		85		149		228
Replacement provisions		275		245		793
Provisions / (reversal of provisions) (*)		(568)		1,014		8,489
Impairment losses		--		--		11,997
Construction accounting margin		(926)		(801)		(1,052)
Other expenses		527		480		(598)
Specific adjusting items		3,913		3,222		30,955

(*) This figure composed of expected impairment losses on receivables, provision expenses excluding vacation pay and replacement provisions and impairment losses related to assets.

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.

 

 

2 Accounting Policies (continued)

 

f) Alternative performance measures (continued)

 

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 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 gain on reversal of provisions, non-cash provisional income and expenses, gain or loss on foreign currency translation on equity, unhedged portion of investment hedging on Global Liman, adjusted for the non-cash port intangibles amortisation charge, and adjusted for change in accounting policies, giving a measure closer to actual net cash generation, which the directors' consider a key benchmark in making the dividend decision. Management decided this year that in the light of a more meaningful presentation of the underlying profit, the unhedged portion of the investment hedge on Global Liman and any gain or loss on foreign currency translation on equity as explained in note 14 have been excluded.

 

Underlying profit and adjusted earnings per share computed as following;

 

		Six months ended 30 September 2021 (USD '000) (Unaudited)		Six months ended 30 September 2020 (USD '000) (Unaudited)		15-months ended 31 March 2021 (USD '000) (Audited)
Loss for the Period, net of IFRS 16 impact		(23,301)		(31,152)		(94,689)
Impact of IFRS 16		(1,581)		(1,679)		(3,300)
Loss for the Period		(24,882)		(32,831)		(97,989)
Amortisation of port operating rights / RoU asset / Investment Property		10,600		8,315		25,126
Non-cash provisional (income) / expenses (*)		68		1,408		9,510
Impairment losses		--		--		11,997
Unhedged portion of Investment hedging on Global Liman		10,599		9,497		39,038
(Gain) / loss on foreign currency translation on equity		136		5,713		1,238
Underlying (Loss) / Profit		(3,479)		(7,898)		(11,080)
Weighted average number of shares		62,826,963		62,826,963		62,826,963
Adjusted earnings per share (pence)		(5.54)		(12.57)		(17.61)

(*) This figure composed of employee termination expense, replacement provision, and provisions / (reversal of provisions) under specific adjusting items.

 

 

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 investments are comprised of marketable securities which can be quickly converted into cash.

Net debt comprised as following:

		Six months ended 30 September 2021 (USD '000) (Unaudited)		Six months ended 30 September 2020 (USD '000) (Unaudited)		15-months ended 31 March 2021 (USD '000) (Audited)
Current loans and borrowings		61,351		80,773		295,200
Non-current loans and borrowings		483,464		494,354		253,734
Gross debt		544,815		575,127		548,934
Lease liabilities recognized due to IFRS 16 application		(66,856)		(66,374)		(65,918)
Gross debt, net of IFRS 16 impact		477,959		508,753		483,016
Cash and bank balances		(82,616)		(108,854)		(170,599)
Short term financial investments		(57)		(78)		(63)
Net debt		395,286		399,821		312,354
Equity		61,017		124,596		86,563
Net debt to Equity ratio		6.48		3.21		3.61

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 30 September 2021 (USD '000) (Unaudited)		Six months ended 30 September 2020 (USD '000) (Unaudited)		15-months ended 31 March 2021 (USD '000) (Audited)
Gross debt		544,815		575,127		548,934
Lease liabilities recognised due to IFRS 16 application		(66,856)		(66,374)		(65,918)
Gross debt, net of IFRS 16 impact		477,959		508,753		483,016
Adjusted EBITDA (annualized)		(5,526)		8,725		(6,725)
Impact of IFRS 16 on EBITDA (annualized)		(5,101)		(4,889)		(6,592)
Adjusted EBITDA, net of IFRS 16 impact		(10,627)		3,836		(13,317)
Leverage ratio		NA		132.6x		NA

 

 

2 Accounting Policies (continued)

 

f) Alternative performance measures (continued)

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 30 September 2021 (USD '000) (Unaudited)		Six months ended 30 September 2020 (USD '000) (Unaudited)		15-months ended 31 March 2021 (USD '000) (Audited)
Acquisition of property and equipment		3,895		10,045		27,913
Acquisition of intangible assets		46,392		44,170		56,557
CAPEX		50,287		54,215		84,470

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 30 September 2021 (USD '000) (Unaudited)		Six months ended 30 September 2020 (USD '000) (Unaudited)		15-months ended 31 March 2021 (USD '000) (Audited)
Adjusted EBITDA (annualized)		(5,526)		8,725		(6,725)
Impact of IFRS 16 on EBITDA (annualized)		(5,101)		(4,889)		(6,592)
Adjusted EBITDA, net of IFRS 16 impact		(10,627)		3,836		(13,317)
CAPEX		(50,287)		(54,215)		(84,470)
Cash converted after CAPEX		(60,914)		(50,379)		(97,787)
Cash conversion ratio		NA		NA		NA

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 September 2021 and 2020, and for the 15 months period ended 31 March 2021, the relevant hard currencies for the Group are US Dollar, Euro and Singaporean Dollar.

 

3. Segment reporting

 

1. Products and services from which reportable segments derive their revenues

 

The Group operates various cruise and one commercial port, and all revenue is generated from external customers such as cruise liners, ferries, yachts, individual passengers, container ships and bulk and general cargo ships.

 

2. 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 two main segments, commercial and cruise businesses. Under each main segment, Group had presented its operations on port basis as an operating segment, as each port represents a set of activities which generates revenue and the financial information of each port is reviewed by the Group's chief operating decision-maker in deciding how to allocate resources and assess performance. Spanish Ports are aggregated due to the Group's operational structure. 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. Following the disposal of Port Akdeniz, the only port within the commercial segment is Port Adria.

 

The CEO evaluates segmental performance on the basis of earnings before interest, tax, depreciation and amortisation excluding the effects of Specific adjusting items 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 investments which are fully integrated into 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 Group 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.

 

The Group has the following operating segments under IFRS 8:

 

• BPI ("Creuers" or "Creuers (Barcelona and Málaga)"), VCP ("Valetta Cruise Port"), Ege Liman ("Ege Ports-Kuşadası"), Bodrum Liman ("Bodrum Cruise Port"), Ortadoğu Liman (Cruise port operations) (sold in January 2021; see note 5), Italian Ports ("Cagliari Cruise Port", "Catania Cruise Port", Ravenna Cruise Port", "Taranto Cruise Port"), Nassau Cruise Port ("NCP"), Antigua Cruise Port ("GPH Antigua"), Lisbon Cruise Terminals, SATS - Creuers Cruise Services Pte. Ltd. ("Singapore Port"), Venezia Investimenti Srl. ("Venice Investment" or "Venice Cruise Port"), La Spezia Cruise Facility Srl. ("La Spezia"), Balearic Handling SLA ("Balearic"), and Shore Handling SLA ("Shore") which fall under the Group's cruise port operations.
• Port of Adria ("Port of Adria-Bar") and Ortadoğu Liman (Commercial port operations) ("Port Akdeniz-Antalya") (sold in January 2021; see note 7) which both fall under the Group's commercial port operations.

 

The Group's reportable segments under IFRS 8 are BPI, VCP, Ege Liman, Nassau Cruise Port, Antigua Cruise Port, Port of Adria (Commercial port operations) and Ortadoğu Liman (Commercial port operations).

 

Bodrum Cruise Port, Italian Ports, Port of Adria (Cruise Operations), Ortadoğu Liman (Cruise operations), Shore, Balearic and Equity accounted investees are not exceeding the quantitative threshold, have been included in Other Cruise Ports.

 

Global Liman, BPI, Global BV, GP Melita, POH, GP Netherlands, Global Depolama, GP Med, GPH Americas, and GPH Bahamas do 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.

Any items which are not attributable to segments have been disclosed as unallocated.