Grand Harbour Marina plc - Interim Results
On 26 August 2020, Grand Harbour Marina plc (GHM) published its interim condensed financial statements covering the six-month period ended 30 June 2020.
Performance Overview
During the period under review, GHM reported a marginal increase in revenue to €2.09 million (H1 2019: €2.03 million) despite experiencing significant disruptions due to the COVID-19 pandemic. Operating expenses contracted by 4.2% to €1.3 million mainly reflecting the reduction in administration expenses which came about from the €74,000 government grant which the Group obtained in response to the global pandemic as well as savings of €24,000 in selling and marketing expenses.
As a result, operating profit amounted to €0.81 million representing an 18% increase from the previous comparable figure. Adding back depreciation and amortisation of €0.19 million (Jan – Jun 2019: €0.18 million), GHM’s earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to €1.0 million representing a 16% increase from the previous comparable figure of €0.86. Meanwhile, net finance costs remained virtually unchanged at €0.44 million.
The Group incurred a ‘share of loss of equity-accounted investee, net of tax’ which amounted to €0.41 million compared to the €0.1 million profit generated in the first half of 2019. The Directors noted that although the IC Cesme Marina maintained seaside revenues at a level similar to that generated in 2018 and 2019 and that landside occupancy was maintained at 98% (H1 2019: 100%), the Turkish marina experienced a significant drop in landside revenues because of the partial curfews and social distancing measures which were put in place for a three-month period. Overall, total revenue at the IC Cesme Marina stood at €1.5 million compared to €1.9 million in the first half of 2019. Another important contributor to this weaker result was the drop in value of the Turkish Lira of 18% when compared to the exchange rate for the corresponding period in 2019. Meanwhile, despite the decrease in visitor and seasonal revenues, these were compensated by 51 new annual contracts, which resulted in a net increase of 833 square metres of water area let over 2019. This resulted in a 22% decline in EBITDA to €0.7 million from €0.9 million in the previous comparable period. After deducting exchange losses of €1.4 million which arose from Euro denominated loans affected by the weakening of the Turkish Lira, and interest costs, depreciation and IFRS 16-related expenses of €0.5 million, IC Cesme Marina generated a loss before tax of €1.2 million (H1 2019: profit before tax of €0.1 million).
Overall, GHM reported a pre-tax loss of €0.05 million (Jan – Jun 2019: pre-tax profit of €0.34 million) primarily due to the significantly weaker performance at the IC Cesme Marina. After accounting for a tax charge of €0.14 million (Jan – Jun 2019: €0.11 million), the net loss for the period under review amounted to €0.18 million (Jan – Jun 2019: net profit of €0.24 million), resulting in a loss per share of €0.0091 (Jan – Jun 2019: earnings per share of €0.0119).
The condensed Statement of Financial Position as at 30 June 2020, compared to the corresponding figures as at 31 December 2019, shows a slight decrease in total assets to €28.2 million (31 December 2019: €28.5 million), mostly reflecting the drop in cash balances to €1.8 million which was mainly due to an intercompany cash transfer of €2.0 million which outweighed the increases in trade and other receivables and other investments. Meanwhile, total liabilities remained unchanged at €24.9 million. As a result, the company’s equity base contracted by 6.9% to €3.3 million (31 December 2019: €3.5 million). This translates into a net asset value per share of €0.1644.
Dividend
The Directors did not declare an interim dividend.
Outlook
In their commentary, the Board of Directors explained that the coronavirus will continue to impact certain parts of the business, especially superyacht and pontoon visitors in both Malta and Turkey as well as revenues from landside activities in Turkey. The Board also reaffirmed the position it stated in the company announcement of 2 April 2020 that the company has sufficient resources to meet all its payment obligations, including but not limited to salaries and annual bond interest payments and its ability to redeem in full its current €15 million bond which matures in 2027. Going forward, the Board remains vigilant in following developments to mitigate risks and to exploit opportunities that may arise. The Board will also maintain its focus on enhancing the sustainability of the company by improving its operating efficiencies during this challenging period.
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