Grand Harbour Marina plc - Interim Results
On 30 August 2019, Grand Harbour Marina plc (GHM) published its interim condensed financial statements covering the six-month period ended 30 June 2019.
Performance Overview
During the period under review, GHM reported a 14.2% drop in revenue to €2.03 million largely reflecting lower demand for super-yacht annual and visitor contracts as well as the consequential decline in income from utilities.
Similarly, operating expenses contracted by 16.3% to €1.3 million on the back of savings in cost of sales as well as savings of €0.1 million following the adoption of IFRS 16 which deals with the accounting of leases.
As a result, operating profit amounted to €0.73 million representing a 10.3% decline from the previous comparable figure. Adding back depreciation and amortisation of €0.14 million (Jan – Jun 2019: €0.11 million), GHM’s earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to €0.86 million representing a 5.8% drop from the previous comparable figure of €0.92 million registered in the first six months of 2018.
On the other hand, net finance costs increased by 55.5% to €0.49 million largely due to the impact of IFRS 16 as GHM accounted for €0.2 million as the interest element on its lease liabilities.
Share of profit of equity-accounted investee amounted to €0.1 million which is 5.7% below the €0.11 million registered in the previous comparable period. The Directors noted that despite a net increase of 945 square metres of water area that is let at the IC Cesme marina in Turkey and landside occupancy remained at 100%, revenue, in euro terms, still contracted by 5% to €1.9 million reflecting a weaker Turkish Lira. However, this drop in revenue was offset by a larger drop in expenses (on the back of a weaker currency as well as the impact of IFRS16) which led to an improved EBITDA figure for the Turkish marina of €0.9 million compared to €0.8 million in the previous comparable period. After deducting interest costs, depreciation and the IFRS 16 charge, the IC cesme marina in Turkey registered a pre-tax profit of €0.1 million compared to €0.3 million during the first six months of 2018.
Overall, GHM reported a 44.3% drop in pre-tax profit to €0.33 million (Jan – Jun 2018: €0.6 million) laregly reflecting the impact of IFRS16 as well as the weaker performances of both marinas. After accounting for a tax charge of €0.11 million (Jan – Jun 2018: €0.17 million), the net profit for the period under review amounted to €0.23 million representing a 46.6% drop from the previous comparable period and an earnings per share of €0.0114 (Jan – Jun 2018: €0.0214).
The condensed Statement of Financial Position as at 30 June 2019, compared to the corresponding figures as at 31 December 2018, shows a 17.8% increase in total assets to €26.2 million (31 December 2018: €22.3 million) mostly reflecting the inclusion of €3.3 million in right-of-use assets following the implementation of IFRS 16 as from this financial year. It is also noteworthy to highlight that financial assets increased from €0.5 million to €2.7 million. However these were offset by a corresponding drop in cash balances to €6.3 million. Total liabilities also increased by 20.6% to €22.9 million as a result of the recognition of €4.2 million in lease liabilities. Overall, the company’s equity base grew by 1.9% to €3.4 million (31 December 2018: €3.3 million). This translates into a net asset value per share of €0.1677.
Dividend
The Directors did not declare an interim dividend.
Outlook
In their commentary, the Board of Directors explained that, during the period under review, the Company faced a number of challenges and that its performance is strongly indicative of its resilience. Going forward, the Board will maintain its focus on improving operating efficiencies by controlling costs and maximizing revenue. The Board also continues to seek new investment opportunities with the aim of enhancing the company’s overall profitability.