Grand Harbour Marina plc - Interim Results

Thursday, August 31st, 2017

On 31 August, Grand Harbour Marina plc published its 2017 interim financial statements covering the six months ended 30 June 2017.

Performance Overview

During the period under review, the marina in Malta registered a 4.7% drop in revenues to €1.98 million largely reflecting the €0.1 million novation fee that was generated in the first half of 2016 in respect of the re-sale of a super-yacht berth which was not repeated in 2017. Meanwhile, berthing revenues were relatively flat as the increase in annual contract revenues was offset by small reductions in seasonal and visitor revenues. The Company also noted a 9% increase in electricity revenues reflecting higher levels of power usage by some super yachts.

Operational expenses dropped by 3.7% to €1.25 million on the back of reduced commissions and costs for using sold berths as well as a slight reduction in overheads. Nonetheless, these savings were partially offset by the increased electricity costs.

As a result, the Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) contracted by 6.4% to €0.74 million with the EBITDA margin similarly declining to 37.2% (H1 2016: 37.9%).  After accounting for depreciation charges of €0.14 million (H1 2016: €0.15 million), the operating profit for the first six months of 2017 amounted to just below €0.6 million compared to €0.64 million in the first half of 2016.

The Group’s interim results were adversely impacted by the significantly lower share of profits from the 45% shareholding in IC Cesme marina in Turkey of €0.008 million in contrast to €0.1 million registered in the previous corresponding period. The decline in profitability at the Turkish marina mainly reflects the drop in the number of international boats visiting the marina in view of the political and economic uncertainty prevailing in the country. On the other hand, the Directors noted that although 50 boats left the marina during the period under review, IC Cesme concluded 59 new berth rental contracts with a positive net impact on the square metres of water area let. As such, berths in the Turkish marina remained 100% occupied but scope for revenue growth remains with occupancy by square metre at 70%. Landside occupancy has been maintained at 100% but rental income from landside properties in euro terms have decreased by 5%. Furthermore, the marina in Turkey was also adversely impacted by unfavourable exchange movements amounting to €0.2 million.

Net finance costs during the period under review amounted to €0.37 million which represents a 3.3% decline from the corresponding figure for the first six months of 2016. The 2017 interim results do not reflect any financial impact from the new €15 million bond issued in recent weeks.

Overall, the Group’s pre-tax profit amounted to €0.23 million representing a 34.8% drop from the €0.35 million pre-tax profit registered in the first half of 2016. After accounting for a tax charge of €0.15 million (H1 2016: €0.16 million), the Group’s net profit amounted to €0.08 million representing a 56.6% drop from the previous corresponding figure. This translates into an earnings per share figure of €0.0041 (H1 2016: €0.0095).

The Statement of Financial Position as at 30 June and compared to the corresponding figures as at 31 December 2016 shows a 3% increase in total assets to €17.28 million on the back of a 60% increase in cash and cash equivalents to €1.74 million and an 18.75% rise in trade receivables to €1.29 million. This was partially offset by the 6.8% reduction in loans to the parent company to €3.95 million which in turn is the result of a €0.89 million reduction in the cash pledge to Isbank (with whom IC Cesme has an outstanding bank loan) and an additional €0.6 million loan to the Company’s major shareholder, CNMI. Total liabilities also increased by 3% to €14.37 million. Overall, the Group’s equity base increased by 3% to €2.91 million mainly reflecting the profit registered during the period under review. This translates into a net asset value per share of €0.1456 (Dec 2016: €0.1415).

Dividend

The Directors did not declare an interim dividend.

Outlook

The Directors welcomed the conversion of the water’s edge Macina bastion building into a luxury boutique hotel under the management of IBB Hotel Collection which will further improve the area surrounding the marina in Malta. The Directors also noted that the Company has recently moved its offices from the Capitainerie (which has since been successfully sub-let) to another area in the vicinity of the marina.

Looking ahead, the Directors shall continue to focus on sustaining the operating efficiency of the marinas whilst also seeking new investment opportunities that will enhance the Group’s profitability.

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Grand Harbour Marina plc – Interim condensed consolidated financial statements for the six months ended 30 June 2017.

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