Global Ports Holding (GPH), the world’s largest operator of cruise ports, has reported a much wider nine mont loss than last year and issued a profit warning by saying that its cargo facilities continue to underperform and outweigh the positive development of its cruise facilities.
“As a result of the weakness in our Commercial ports, we now expect the Group to deliver for the full year a decline in Consolidated EBITDA in percentage terms of mid-single digit against 2018,” said the company that is headquartered in Istanbul and listed in London, in a statement.
Group net loss in the first nine months of the year widened to $14.8 million from $0.1 million year-on, while revenes fell by $3.0 million to $91.5 million.
“During Q3 2019 we announced that in light of the emerging opportunities in our cruise business that we were undertaking a strategic review of the Group. The process is currently expected to conclude in Q1 2020, however there can be no certainty as to the final outcome. A further announcement will be made when it is appropriate to do so,” GPH said.
Although the company has not explicitly said so, the review could result in disposal of the cargo ports that hurt the company’s performance for some time now.
Revenue from the cruise operations of the company rose by 11.2% to $46.2 million and EBITDA by 13.9% to $32.6 million in the first nine months, year on.
Revenue from the two cargo facilities, however, fell by 14.4% to $33.7 million and EBITDA by 19.5% to $33.7 million in the first nine months of the year.
“Our Cruise business continues to perform well in Q4 2019 and looking into 2020 and 2021, organic growth is expected to be strong driven by a significant increase in passengers at both Ege and Bodrum. The recent addition of Nassau and Antigua cruise ports to our cruise portfolio is a truly transformational for the group. Cruise passenger volumes for 2020 will increase by close to 100% and we expect to deliver in excess of $85m of EBITDA from our Cruise business by 2022, a growth rate of in excess of 100% from 2018 levels,” GPH stated.
“As expected, macro-economic factors such as trade tariffs continued to negatively impact our Commercial business in Q3, particularly Port Akdeniz. Throughput container volumes were once again weak in the period and this sustained weakness has continued into Q4. Longer term an agreement to end the current escalation of trade tariffs involving China and a general improvement in Chinese GDP are, we believe, the most likely catalysts for a meaningful improvement in container throughput volumes,” the company said.