Grand Harbour Marina plc - Full-Year Results

Tuesday, April 24th, 2018

On 23 April, Grand Harbour Marina plc (GHM) published its financial statements for the year ended 31 December 2017. 

Performance Overview

During the year under review, GHM registered a 2.4% drop in revenue emanating from the Grand Harbour marina in Malta. The drop in income largely reflects the non-recurrence of a fee of €0.1 million received by the Company in 2016 in relation to the resale of a 75-metre berth. Meanwhile, berthing revenues as well as income from utilities were in line with the previous year’s figures. Nonetheless, the Directors noted that annual contracts increased by 8% as management successfully converted seasonal and visitor revenue to annuals. Although the Company continued to receive enquires on berth sales, none of these enquires have been converted into a completed sale. The last berth sale was recorded in 2012.

Operating expenses dropped by 2.7% to €2.6 million, leading to an earnings before interest, tax, depreciation and amortisation (EBITDA) figure of €1.52 million representing a 1.8% drop from the corresponding 2016 figure given the larger drop in revenues.

After accounting for depreciation of €0.32 million (+3.6%), GHM reported an operating profit figure of €1.2 million representing a 3.2% drop from the corresponding figure for 2016.

The Group also recognised an amount of €0.05 million as share of profit from its 45% shareholding in IC Cesme marina in Turkey which is significantly lower than the share of profits of €0.29 million recorded in 2016. The decline in profitability at the Turkish marina was due to the adverse impact of a weakening Turkish Lira which in turn is the result of political uncertainty in the country and concerns over terrorism. It is important to highlight that, in  Turkish Lira, IC Cesme reported an 11% increase in revenues as the marina registered a higher berthing occupancy level (in square metre terms) whilst its berths remained 100% occupied. Furthermore, operating expenses at the Turkish marina rose by 27.5% to €3.7 million leading to a significantly lower EBITDA figure of €0.8 million (2016: €2.1 million) and a pre-tax loss of €0.3 million (2016: pre-tax profit of €1.0 million).

The GHM Group, also reported an 8.3% increase in net finance costs to €0.84 million which included a €0.17 million amortisation charge related to the bond issue costs. In 2017, GHM issued a new €15 million bond to repay the outstanding €11 million bond as well as to finance further waterside investments which to date have not yet materialised.

Overall, the Group reported a pre-tax profit of €0.4 million representing a 45.8% drop from the corresponding figure in 2016.

Despite the weaker profitability, the tax charge for the year under review amounted to €0.36 million which is only 5.6% lower than the tax expense for 2016. This is due to the unutilised portion of the bond proceeds, amounting to around €3.6 million, interest on which could not be classified as tax deductible expenses. As a result, the net profit of GHM amounted to €0.05 million compared to €0.38 million in 2016. This translates into an earnings per share of €0.003 (2016: €0.019).

The Statement of Financial Position as at 31 December 2017 shows total assets of €21.05 million representing a 25.4% increase from the corresponding figures as at the end of the 2016 financial year reflecting the significant increase in cash balances to €7.7 million (2016: €3 million including the assets held in trust which were released after the issue of a new bond) largely reflecting the unutilised portion of the bond proceeds. Similarly, total liabilities increased by 30.3% to €18.17 million largely reflecting the higher amount borrowed through the 2017 bond issue. Overall, the Group’s equity base increased by 1.6% to €2.9 million largely reflecting the profit registered during the period under review. This translates into a net asset value per share of €0.144 (2016: €0.142).

Dividend

The Directors did not recommend the payment of a dividend.

Outlook

Looking ahead, the Directors noted that the international political and economic environment still provides a great deal of uncertainty. Nonetheless, the Board is confident that with the backing of its major shareholder, Camper & Nicholsons Marina Investments Ltd, and of its joint-venture partners in Turkey, Ibrahim Cecen Investments Holding AS, the Group will continue to exploit the development opportunities presented by the market and strengthen its operating base.

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Grand Harbour Marina plc – 2017 Annual Report

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