Global Investment Holdings FY 2019 Financials Results: Great Success despite a Tough Year…

Global Investment Holdings announces Consolidated Net Revenues of 1,441.0mn TL and an Operating EBITDA of 563.3mn TL in 2019, which indicate a robust 28% and 21% growth compared to 2018, respectively - March 11, 2020 Evaluating Global Investment Holdings’ financial results for 2019, Chairman & CEO, Mehmet Kutman, stated, “The last two years presented a challenging operating environment for our companies with significant global volatility as well as political uncertainty. A generally increasing risk premium in emerging markets, escalating geopolitical risks in neighbouring countries and political uncertainties in the domestic market due to consecutive elections put a halt to private investments across many sectors. Despite these challenges, as Global Investment Holdings, we have left behind a year in which we experienced significant developments in line with our global growth vision". Drawing attention to the solid results and careful risk management that ensured Global Investment Holdings’ steady performance in this challenging environment, the Chairman continued: “We, Global Investment Holdings, continue to expand our global presence as we strive to contribute to the development of Turkey and improve our competitiveness. We shall continue to invest with the same determination to grow, to take bold steps in our role as leader and play our part in the development of Turkey". Commenting on the results, CFO Mehmet Kerem Eser stated that, “thanks to the strategy we stuck to, and the measures we took, we achieved continued growth, despite such a tough year. Due to volatile markets in 2019, we have attached more importance to liquidity and liability management, in addition to our growth and profitability targets. Our diversified portfolio structure, effective balance sheet and risk management approach were positively reflected in our financial results. We are pleased to have completed 2019 maintaining our robust balance sheet structure". Mr. Eser further said, “Our main target was to maintain and improve the positive results we had achieved while we placed greater importance on being efficient, competitive and profitable in our core businesses". GIH announced its financial results for 2019. Consolidated net revenues reached TL 1,441 million compared to TL 1,128.4 million in 2018, representing a strong increase of 28%. Nearly all business divisions under the Company contributed to this increase, with the gas division contributing the most. In 2019, Operational Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) amounted to TL 563.3 million, compared to TL 465 million in 2018, which represents a robust 21% growth. The gas division was the major contributor to the EBITDA increase. On a divisional basis: The gas division, achieved 167 million m³ sales volume in 2019, compared to 138.4 million m³ for 2018. This increase was achieved by focusing on new customer acquisitions to reduce the effects of seasonality and to increase market share. Revenues nearly doubled yoy, reaching TL 428.4 million; mainly attributable to the increase in sales volume generated by new sales channels and better pricing due to the Botaş tariff hike. Meanwhile, the gas division’s operating EBITDA reached TL 101.1 million in 2019, more than doubling yoy and translating into c.7pp EBITDA margin expansion. The gas division managed to maximize EBITDA creation in 2019 thanks to the increase in sales volume generated by new sales channels, increase in gas margin and effective cost management. The ports division’s revenues were TL 668.5 million at the end of 2019, up by 11% yoy, while operating consolidated EBITDA increased by 9% yoy, reaching TL 437.1 million. The power division, which includes co/tri-generation- and biomass-based renewable power production, reported TL 148.5 million revenues in 2019, up by a solid 79% over the previous year. The increase was mainly attributable to the commencement of 12MW Mardin biomass power plant, selling electricity at the feed-in tariff rate of US$0.133/kWh and the pleasing performance of co/tri-gen business. The power division’s EBITDA increased more than two-fold, reaching TL 18.3 million. The outstanding EBITDA growth is mainly attributable to improving plant operating capability and operating performance. The mining division realized 483,454 tons of sales, a slight 3% yoy volume reduction in 2019. It reported 96.0mn TL in revenues for the year, a 23% increase yoy thanks to ongoing success in export markets. The mining business operating EBITDA came out at TL 32.7 million in 2019, an increase of 49% yoy. Despite contracting sales volume, improving production performance and sustaining sales volume of high value-add products were the main contributors to profitability. The real estate division reported revenues of TL 42.5 million and an operating EBITDA of TL 21.1 million in 2019, compared to TL 61.1 million and TL 25.6 million, respectively in 2018. Higher revenue recognition in Skycity office project upon completion had boosted the numbers in 2018. The brokerage & asset management division reported revenues of TL 53.5 million in 2019, an 11% yoy increase, and an operating EBITDA of TL 2.7 million, compared to TL 2.9 million in the previous year. The Group’s 80% subsidiary Actus Asset Management’s Equity Funds (Equity Intensive Funds) ranked first among all mutual funds in the market with 73.0% return in 2019, compared to the BIST 100’s 25.4% return. Meanwhile, Actus’ pension fund Vakif Emeklilik Variable Mutual Fund, has had the highest return in its peer group comprising 70 pension funds, with 47.0% return, compared to 27.9% return of its benchmark. GIH reported a consolidated net loss of TL 131 million in 2019, compared to a net loss of TL 89.9 million in 2018. Despite higher revenue recognition along with EBITDA maximization, the net loss stemmed from non-cash depreciation and foreign currency translation differences incurred on Group’s long term borrowings. Depreciation and amortization charges have increased from TL 290.5 million in 2018 to TL 370.2 million in 2019, purely as a result of foreign currency valuations, as well as TL 21.7 million additional charge in 2019 due to first time application of IFRS 16. Also, the Group has incurred TRL 76 million net non-cash foreign exchange losses, compared to TL 89.7 million in the previous year. Net interest expenses in the year were TL 253.9 million, compared to previous year’s TL197.1 million, and the increase is solely attributable to the weakness in TL against hard currencies and TL 15 million additional charge due to IFRS 16. On the operational front, developments are on track in line with the growth strategy by means of new acquisitions and investments mainly into core businesses, which are ports infrastructure, clean energy and asset management. On the ports side, during 2019, Global Investment Holdings was successful in expanding the global reach of its portfolio. The Group grew its network in the Caribbean, winning the cruise port concessions for Nassau Cruise Port in the Bahamas, and Antigua Cruise Port in Antigua & Barbuda. Apart from the remarkable steps taken in the Caribbean, the Group also added to its presence in Asia, with a management contract for Ha Long Cruise Port in Vietnam, while extending the Marina Bay Cruise Centre Singapore concession to 2027, further anchoring its presence in the fast-growing Asia-Pacific region. Additionally Group’s JV successfully acquired the operator of La Goulette Cruise Port in Tunisia. Group now operates 21 ports, including two commercial ports, across 13 countries. During the year, Global Investment Holdings took major steps forward with its clean energy efforts. In the second core business area, GIH added its first solar power plant, Ra Solar, to renewable portfolio with 10.8MWp installed capacity in Mardin in Turkey. GIH’s first international solar plant, Barsolar, will sell electricity with a capacity of 6MWp in Bar in Montenegro and is scheduled to become operational in 2020. The combined installed capacity in renewable energy and energy efficiency investments increased to 100.1 MW, of which 46.0 MW is from renewable sources. Moreover, Naturelgaz, the compressed natural gas subsidiary, signed an agreement to purchase 100% of SOCAR Turkey LNG. There are also tentative plans for an IPO for Naturelgaz in 2020, depending on the market conditions. In the third core business line, subsidiary Actus Asset Management and Turkey’s largest domestic and independent asset management company İstanbul Asset Management have reached an agreement to merge creating, the largest domestic and independent asset management company in Turkey. The transaction is expected to be finalized in 2020. Source: Global Investment Holdings

Global Investment Holdings FY 2019 Financials Results: Great Success despite a Tough Year…

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Global Investment Holdings FY 2019 Financials Results: Great Success despite a Tough Year…

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1.2 tonnes of cocaine seized in Spain’s Algeciras port

Four tonnes of cocaine seized off the Canary Islands

Russia’s ports handled 4.6 mln TEUs in Jan-Oct’24

New Caspian ferry line Turkmenbashi-Olya might finally launch

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Our Expert Analysis

Latest Free Reads

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