Grand Harbour Marina plc - Interim Results
On 24 August 2018, Grand Harbour Marina plc published its interim condensed financial statements covering the six-month period ended 30 June 2018.
Performance Overview
During the first half of 2018, the marina in Malta registered a 19.1% increase in revenues to a multi-year high of €2.36 million, largely reflecting significant increases in seasonal and visitor contracts as well as higher super yacht berthing occupancy. The increased business also led to higher operating expenses which rose by nearly 12% to €1.55 million. However, given the much higher increase in revenues, operating profit improved by 36% to €0.81 million compared to €0.6 million in the first six months of 2017.
The financial performance of the company was also boosted by lower finance costs and a higher contribution from its investment in the Turkish marina IC Cesme. Indeed, net finance costs dropped by 15% to €0.32 million reflecting the coupon differential between the 7% bonds which were redeemed on 21 August 2017 and the new bonds that have a coupon rate of 4.5%. On the other hand, the 45% share of profit from IC Cesme amounted to €0.11 million which is much higher than the €0.01 million in H1 2017. This improvement was driven by cost savings amounting to €0.3 million which outweighed the slight decline in revenues and the negative effect from the significant drop in the value of the Turkish Lira.
Overall, GHM reported a pre-tax profit of just under €0.6 million compared to €0.23 million in the previous comparable period. After accounting for a tax charge of €0.17 million, the company’s net profit amounted to €0.43 million compared to €0.08 million last year.
The condensed Statement of Financial Position as at 30 June 2018, compared to the corresponding figures as at 31 December 2017, shows a 4.3% increase in total assets to €22 million (31 December 2017: €21.1 million) mostly reflecting the increase in the value of GHM’s investment in IC Cesme to €2.67 million compared to €2.56 million as at the end of 2017. Total liabilities increased by 1.7% to €18.5 million. As a result, the company’s equity base expanded by nearly 15% to €3.3 million (31 December 2017: €2.88 million). This translates into a net asset value per share of €0.1652.
Dividend
The Directors did not declare an interim dividend.
Outlook
In their commentary, the Directors noted that both the marina in Malta and IC Cesme reported sound operating performances in the first half of 2018 and that they continue to seek new investment opportunities with the aim of enhancing the company’s overall profitability. However, they also made reference to the prevailing political and economic uncertainties taking place in Turkey. In fact, in the first six months of 2018, a total of 61 boats left IC Cesme which were only partially replaced by 47 new contracts. As a result, while berths remained nearly 100% occupied, the aggregate water area on lease decreased by 630 square metres. In this respect, the financial statements also noted that following the significant decline of the Turkish Lira against the euro currency, GHM shall be undertaking a valuation of its investment in IC Cesme as at 31 December 2018 although it is now premature to make any estimates of the expected impact on the investment value.