Global Ports Regulatory News (GPH)

12 March 2018

GLOBAL PORTS HOLDING PLC

Full Year Results

 Positioned for growth 

Global Ports Holding ("GPH", the "Company" or the "Group"), the world's largest cruise port operator, today announces its audited results the year ended 31 December 2017.

Key financial and operational metrics

Group highlights

· Improving 2H 2017 performance. Q4 revenues up 15.8%, and Q4 Segmental EBITDA up 1.5% YoY

· Group operating profit for the year was lower than prior year at USD 10.9m, almost fully attributable to the one off costs associated with 2017 IPO as well as higher amortization expenses in relation to Port Operating Rights

· Adjusted EBITDA was flat but margin remained strong at 64.7% despite a challenging trading environment in Turkish ports

· The period resulted in a net loss of USD 14.1m, due to the decline in operating profit in addition to a non-cash foreign currency impact from the EUR / USD exchange rate

· Underlying profit was affected by the aforementioned non-cash foreign currency impact but otherwise in line with 2016 due to the robust operational performance. Underlying profit provides a useful profitability benchmark as it excludes one-off IPO expenses and amortisation of port operating rights.

· Strong passenger number growth of 15.2% supported by inorganic growth, but 6.3% cruise revenue decline due to lower contribution from higher yielding Turkish ports. Strong growth at non-Turkish ports where revenue and Segmental EBITDA increased by 9.9% and 6.3%, respectively

· Robust commercial performance with cargo volumes up over 16% and Segmental EBITDA up 9.7%. Segmental EBITDA growth lower than volume growth due to deferral of project cargo from 2017 to 2018 at Port of Adria

· Following USD 17.5m interim dividend (21.6p per share) paid in September 2017, the Directors proposed additional dividend of USD 17.5m (20.1p per share at current exchange rate). This would bring total dividend in respect of the year to a USD 35.0m or 41.7p per share.

· 2018 expected to show mid to high single digit organic growth in Revenue and Adjusted EBITDA

Cruise highlights

· Strong passenger growth of 15.2% which includes a full year contribution from and growth in our Italian ports

· Non-Turkish cruise ports grew strongly, revenue up 9.9% and Segmental EBITDA up 6.3% with improving second half trends

· Turkish cruise ports' revenue was 49.2% lower, impacted by geopolitical events, but remains highly profitable at 59.7% Segmental EBITDA margin

· Q4 2017 showed positive revenue growth of 6.6%

· State of the art Lisbon terminal opened; Ege Port renovation completed

Commercial highlights

· Robust performance with container volumes up 16.6%, general bulk cargo volumes up 16.2%

· Total commercial revenues up 7.9%, Segmental EBITDA up 9.7% to USD 48.3 million with Commercial Segmental EBITDA Margin 120bps ahead of 2016 level

· Growth driven by strong marble and cement exports at Port Akdeniz, and rollout of our modernization programme at Port of Adria

· Accelerated growth; Q4 commercial revenue and Segmental EBITDA up 23.6% and 21.7%, respectively

Outlook and current trading

· Current trading in our Cruise segment in our non-Turkish based ports remains strong. The weakness in Turkish cruise ports is expected to continue into 2018, although passengers and revenue are expected to stabilize compared to the decline experienced in 2017

o A number of cruise lines have begun to communicate their plans to visit our Turkish ports in 2018, which we see as a good sign of a possible recovery.

· The Group remains confident about its M&A activity in and outside Europe in Cruise ports

· Following strong trading in Q4 2017, we expect resilient demand for exports from our commercial ports to continue into 2018, supporting continued growth in commercial revenues

· 2018 expected to show mid to high single digit organic growth in Revenue and Adjusted EBITDA

Mehmet Kutman, Chairman and Co-Founder said;

"In May 2017 we listed on the London Stock Exchange. Despite the geopolitical challenges in Turkey since then, we have been able to deliver stable revenues and underlying profits, achieve strong operating cash flow and attractive dividends. Operating profit was down year on year mainly reflecting the costs of the IPO. Delivering shareholder value remains a key priority for the group as we look to the year ahead."

Emre Sayın, Chief Executive Officer said;

"Our 2017 financial performance reflects the importance of our diversified business, with robust contributions from our commercial operations and strong performance in our cruise ports outside Turkey, where the geopolitical situation continues to be challenging. We are making progress with our strategy set out at the IPO to expand our global footprint of cruise ports, also reducing the significance of Turkey on our overall business. M&A discussions both in and outside Europe are progressing well and we have strengthened our global team as we pursue the next phase of growth. We feel good about 2018 as it starts growing again."

Please join us for a live webcast of the presentation at 9am GMT via the following link:

http://cache.merchantcantos.com/webcast/webcaster/4000/7464/16532/100738/Lobby/default.htm

Alternatively, you can join by dialing +44 (0) 20 3003 2666, # 9923467

An audio recording of results will be made together with a playback facility to be provided after the presentation has finished on GPH IR website at http://www.globalportsholding.com/main-page

Enquiries:

GPH, Investor Relations +90 212 244 60 00

investor@globalportsholding.com 

Asli Su Ata

Ismail Ozer

Brunswick Group LLP +44 (0) 20 7404 5959

Nina Coad

Will Rowberry

Imran Jina

Notes to Editors

Global Ports Holding PLC (GPH) is the world's largest cruise port operator with an established presence in the Mediterranean, Atlantic and Asia-Pacific regions.

Global Ports Holding was established in 2004 as an international port operator with a diversified portfolio of cruise and commercial ports. As an independent cruise port operator, the group holds a unique position in the cruise port landscape, positioning itself as the world's leading cruise port brand, with an integrated platform of cruise ports serving cruise liners, ferries, yachts and mega-yachts. As the world's sole cruise ports consolidator, GPH portfolio consists of investments in 15 ports in 7 countries and continues to grow steadily. GPH provides services for 7.0 million passengers reaching a market share of 23% in the Mediterranean annually. The group also offers commercial port operations which specialize in container, bulk and general cargo handling.

A portfolio of award-winning ports and terminals allows GPH to transfer best practices to its subsidiaries. With a strong focus on operational excellence, enhanced security practices and customer-oriented services, GPH aims to contribute to the development of the cruise industry. It is listed on the London Stock Exchange.

Chairman and founder's statement

Our differentiated model

GPH has shown this year the benefits of its diversified business model. It has delivered a strong performance in its cruise business outside Turkey and a robust performance in commercial. Taken as a whole, I am satisfied with our progress in this reporting year.

The IPO was a key milestone in 2017 with investors acknowledging the exceptional growth potential in the cruise sector, as well as the strength of our container and bulk cargo business.

We are not immune to external events, and during 2017 the business faced a number of unexpected challenges outside of its control, including cancellations due to security concerns in the Eastern Mediterranean region. However, drawing upon our experience, market knowledge and collective and local expertise, we are well positioned and sufficiently resilient and diversified for navigating these challenging markets.

Market growth

What is clear to all our stakeholders is that the cruise industry, and the industries that serve it, have vast growth opportunities. The sector may have been around for a long time, but recent penetration in the market has only peaked at around 3.6% in the core market of the USA, 2.5% in the EU and much less than 2% for most of the rest of the world. (Source: GDP Per Capita: World Bank databank, BREA The Global Economic Contribution of Cruise Tourism 2016 for CLIA)

This is now changing fast as new ideas, fresh fleets and a younger passenger demographic alter the face of the industry. Already running above 100% occupancy, the cruise lines are investing to add c.47% capacity by 2026 and they are growing the market: brands such as Virgin and Disney are enticing aboard a new generation and character of passenger who, previously, might never have considered cruising. Every facet of the cruise experience is also being reimagined. Picture the full drama of a Cirque du Soleil performance aboard a cruise ship - it's already happening, along with a new generation of technologies to make every experience unforgettable.

Against this backdrop, we foresee around five percent annual growth over the next ten years, evidenced by the cruise lines' orders for new ships: the major yards around the world already have contracts to build over 97 new cruise liners, and only a lack of capacity prevents them accepting more. These ships are larger, providing fabulous accommodation, hospitality and entertainment for up to 6,500 passengers.

In turn, economies of scale will drive lower costs, widening the market still further. We are also seeing new target audiences emerging, such as increasingly wealthy citizens from new markets such as China who can fly in and enjoy six Mediterranean countries in seven days.

Expanding into new territories

As the largest port operator in the world, Global Ports Holding is perfectly placed to serve this growth. We have the resources and the know-how to extend existing infrastructure, develop new locations, and find innovative ways to embark, disembark and look after thousands more passengers. As importantly, we bring an unrivalled 360o view of the sector - the cruise lines, the ships, the passengers, the crews and the destination stakeholders - that enables us to perform our role as port operators in a way that meets everyone's needs.

Our growth will also come with new territories. In particular, we believe our vision and skills are highly transferrable to the Americas, including the Caribbean, where passenger numbers (one of our key sources of revenue) are considerably higher.

In the Mediterranean, only our Barcelona port sees the levels of passengers that routinely pass through the core ports of the Caribbean, and this region is our principal focus for business development going forward.

Closer to home, we are looking to continue our expansion through inorganic growth in the Mediterranean, and as I write we are in negotiations with a number of potential new ports.

Typically, port infrastructure is owned by government agencies in one form or another, and negotiations are complex and unpredictable but we are hopeful of making further progress in 2018 in this regard.

As well as the port acquisitions, we continue to drive ancillary revenues, as we look to the opportunities ahead.

We have a skilled and experienced team, and in addition to network growth they will continue to optimise our ports, maximise ancillary revenues from retail and other sources, and assist in restoring business as usual to the world's most beautiful and inspiring regions. I thank them all, and all our stakeholders as we embark on our new chapter of growth.

Mehmet Kutman

Chairman and Co-Founder

Group Chief Executive's Review

Resilient Results

I am pleased with progress in 2017, a year when we achieved tangible advances in integrating our assets, sharing know-how, working to unified codes and systemising the way we do business. In parallel, we were active in raising our ambitions, not only identifying new growth opportunities in our current heartland of the Mediterranean, but also beyond. We also strengthened our management team with new capabilities.

It was also a year when our key metrics broadly confirmed the outcome we had targeted: increased passenger numbers, an expanded port network, good growth in our container and freight business, a sound HSE performance, and a clutch of awards that recognise our standing as the world's leading independent port operator.

Indeed, in the areas that were within our control, we showed how our all-round expertise is working to the benefit of our stakeholders and, by extension, ourselves.

Unfortunately we were impacted by the unexpected geopolitical challenge in Turkey. An attempted coup, attacks and the migrant crisis inevitably affected sentiment and confidence. Cruise lines felt obliged to redirect their programmes elsewhere, resulting in a significant impact on traffic through our most profitable ports in Turkey in 2017. Despite the issues we experienced, based on conversations with our cruise line customers, we are confident that they will restore normal routes in the Eastern Mediterranean, as soon as circumstances allow.

That issue aside, we take many positives from this reporting year. We closed the period with a strong set of Q4 results, showing that our business is sufficiently diversified and robust to withstand even considerable impacts from market conditions. Diversity not only comes from having commercial business run side by side cruise business, but also from the geographical distribution of our ports in different regions in the Mediterranean. Expanding further into the other regions such as the Americas, Asia will further improve our resilience.

Listing on the London Stock Exchange

The year brought several financial, operational and reputational highlights. Perhaps the standout event was our IPO on the London Stock Exchange in May 2017. The IPO has given us additional resources to cultivate new territories and opportunities, as well as to invest in our existing infrastructure as we look to improve the totality of the cruising experience. The year also saw significant expansion as we on boarded investments made in 2016. We hold the majority interest in the ports of Catania, Ravenna and Cagliari, and we made good progress in integrating these excellent locations. I believe we have a clear strength in knowing how to instil our culture in new assets, while giving our local teams the respect and autonomy they deserve. Although it is early days, we can already see material improvements and results in these three Italian ports, whose combined revenues grew by 68% against the previous year. We also keep investing and upgrading our existing ports. A good example is the recent renovation of Ege Port where we have undergone a major upgrade of shopping facilities. Upon the increase of passengers, we expect this project to have a positive impact on both passenger experience and ancillary revenues.

As well as optimizing existing ports, we also brought a fresh project to fruition, from the ground up. Lisbon's new flagship terminal is one of the cruising sectors finest, and GPH was instrumental in bringing together the state authorities of Portugal and the cruise lines to make this innovation happen. We were involved at the blueprint stage, contributing our experience of operational needs, and ensured that day-to-day operations continued seamlessly alongside the project. The new infrastructure stands ready to welcome a projected passenger increase of over 20% in 2018.

This commitment to playing our part in the overall cruise experience was again recognised by both industry and external media. Most notably, Valletta Cruise Port gained the title "Best Terminal Operator 2017" and Barcelona "Best Turnaround Port Operations 2017". This was one of nine awards that GPH ports won during the year, including success in the consumer-facing World Travel Awards and accolades from the industry's respected Cruise Insight publication.

Strength from diversification

Our numbers for 2017 tell the dual story I have outlined: a year of strong performances from a diverse but centralized port network, offsetting the impact on our business of external factors in the Eastern Mediterranean. The net result was that Segmental EBITDA was essentially flat year-on-year. Whilst operating profit reduced from USD 20.9 m to USD 10.9 m, this was principally due to the costs of the IPO and higher amortization costs.

Passenger numbers, our main revenue stream from the cruise sector, grew by 15.2%, driven by good performances in the Mediterranean and the contribution of our 3 new Italian ports. This was offset by the decline in the Turkish cruise ports which have significantly higher yields per passengers such that overall cruise revenue declined. I was also pleased with our commercial operation, where container business grew by 16.6% and general bulk by 16.2%, and revenue increased by 7.9% Overall, commercial services contributed 56.9% of our total revenues.

Market overview

Overall the backdrop for the cruise industry remains extremely positive. The current cruise ship order book is supportive of the outlook for the global cruise industry and passenger volumes, with global projections of 27.2 million passengers in 2018 (5.4% growth vs 2017). There are currently 97 ships on order for the global fleet between 2018 and 2026, the highest on record.

In addition to a record high in terms of the number of ships, cruise ships are also getting increasingly bigger. The average number of berths per vessel in 2017 was 1,466, while the average size for the 97 new ships on order is over 3,000 berths per ship.

Based on current known orders and the greater size of new ships once completed this implies an average passenger growth rate of c. 5% per annum over the medium term, with new supply arguably creating its own demand. The European order book through 2026 indicates that ship fleet capacity is to increase at a CAGR of c. 6%.

According to Cruise Industry News, the Europe market is set to grow at a 10.2%, from 6.8mn PAX in 2017 to 7.5mn PAX in 2018, and the Asia-Pacific market to grow at 9% to 5.2mn PAX, while the America's pace is lower, at 4.5%, to reach 14.3mn PAX by 2018.

In addition, the global macro environment remains supportive of with resilient and strong growth through our commercial ports. Given our geographic exposure to Turkish exports, notably in marble and cement, we would expect, all other things being equal, to benefit from the growing construction markets in MENA, Asia and the Western Mediterranean.

2018 Outlook

Current trading in our Cruise segment in our non-Turkish based ports remains strong. The weakness in Turkish cruise ports is expected to continue into 2018, although passengers and revenue are expected to stabilize compared to the decline experienced in 2017. A number of cruise lines have begun to communicate their plans to visit our Turkish ports in 2018, which we see as a good sign of a possible recovery.

The Group also remains confident about its M&A activity in and outside Europe in cruise ports.

Following strong trading in Q4 2017, we expect resilient demand for exports from our commercial ports to continue into 2018, supporting continued growth in commercial revenues.

Full year 2018 is expected to show mid to high single digit organic growth in Revenue and Adjusted EBITDA.

We look ahead with confidence and ambition. There are more than 750 cruise ports around the globe, and it would be a natural progression to take our compelling offering of expertise and resources to fresh markets.

We will continue to achieve the triple-win of performing for, and benefiting from, our cruise lines, host governments/owners, and passengers. Western markets continue to look buoyant and we expect to see an increased number of passengers passing through our infrastructure during 2018.

Our ambitious plans, as we continue to coalesce as a Group and target international growth, are being well served by a strengthened team. Dr. Ece Gürsoy joined us as Chief Legal Officer, bringing with her a wealth of experience in project finance, infrastructure and private equity. Collin Murphy is our new Regional Coordinator, having previously managed development, port negotiations and relationships for Norwegian Cruise Line Holdings for more than 20 years. Mark Robinson joined GPH as Chief Commercial Officer, the former President of Intercruises Shoreside&Port Services - who brings with him an excellent experience in spanning operations, infrastructure and management, and will help to deliver the development of ancillary services as part of our core strategy. Burak Gülay took up the role of Ancillary Services Director, having gained a proven track record of increasing ancillary passenger revenues at Pegasus, Turkey's largest low-cost airline.

GPH has also been honored with hosting the industry's prestigious Seatrade Cruise Med event at our Lisbon port in 2018, and at our Malaga port in 2020. Both are excellent opportunities to showcase our strengths to cruise lines, government tourist offices and port authorities. We have a great business and look forward to its continued progress.

EMRE SAYIN

CEO

Financial Overview

Overall revenues during the year increased slightly by 1.3% from USD 114.9m in FY 2016 to USD 116.4m in 2017, and Operating profit declined to USD 10.9m in 2017 from 20.9m in 2016, mainly due to the IPO expenses in 2017 (approximately USD 11.6m). The movement in revenue reflected inorganic growth contribution from the Italian ports offset by a move in passengers away from the higher-yielding Turkish ports.

Thanks to the well diversified portfolio, the ongoing weakness in Turkish Cruise ports has been offset by the strong performance of the Commercial business and non-Turkish cruise ports in the network, maintaining Segmental EBITDA margin at a high level of 69.2%.

The period resulted in a net loss of USD 14.1 mainly due to IPO expenses and increased amortization expenses in relation to Port Operating Rights (similar to the Operating profit), as well as a non-cash foreign currency effect from EUR / USD exchange rate. Underlying Profit in 2017 was impacted by this non-cash foreign currency effect from EUR / USD exchange rate, but otherwise was in line with 2016 due to the robust operational performance (IPO expenses and amortization of Port Operating Rights excluded from Underlying Profit).

During the year, the Commercial segment performed well with Commercial Revenue and Segmental EBITDA growing by 7.9% and 9.7% YoY, respectively. Also, we have seen a strong performance in our non-Turkish cruise ports, with 9.9% revenue and 6.3% EBITDA growth in 2017 YoY.

Our cruise segment demonstrated a strong passenger growth of 15.2%

· Far above Mediterranean averages

· 3.5% organic growth across the cruise port portfolio (taking into account pro-forma effect for Italian port acquisitions which are consolidated for the first time in 2017) more than offset the decline in the Turkish ports of 58.2%

· GPH's non-Turkish ports registered solid 25.9% passenger growth in 2017 (organic growth: 10.8%)

Despite the overall positive volume trend in passengers, revenues and Segmental EBITDA from cruise operations have declined by 6.3% and 12.7% respectively, due to a lower share of higher-yielding Turkish ports.

Passenger mix changed slightly in favor of transit passengers, resulting in a slightly lower cruise segment's profitability. Transit passengers recorded a 20.3% increase in 2017, while the expansion of more profitable turnaround passengers was relatively lower at 8.0%, resulting in 2pp decrease in the share of turnaround passengers.

Meanwhile, the Cruise Segment was positively impacted by Euro/USD parity in 2017. All cruise ports' revenues are mainly Euro denominated while our reporting currency is USD therefore, the appreciation of the Euro in 2017 had a slight positive impact on overall financials.

Commercial revenues were USD 66.1m in FY 2017, up 7.9% year-on-year, due to strong growth in container volumes (up 16.6% YoY), along with a 16.2% increase in general and bulk cargo compared to FY 2016. Growth in container volumes was driven by marble exports at Port Akdeniz. Growth in general and bulk cargo was driven by cement exports in Port Akdeniz, as well as steel coils in Port of Adria.

Container yields declined by 5.7% driven by the change in TEU mix between full and empty containers. General & bulk cargo yields were down 8.5% due to lower project cargo volume. Also, change in product mix (increase in steel coils volume in particular in Port of Adria) had an impact on yields.

Commercial Segmental EBITDA increased by 9.7% to USD 48.3m, and the Commercial EBITDA margin grew by 120 bps in FY 2017 YoY, mainly driven by operational improvement at Port Akdeniz, increase in high-margin TEU business and the currency environment in Turkey which is favorable for GPH with its USD revenue streams but mainly TL cost base.

Capital Expenditure

Capital Expenditure for 2017 was USD 13.9m, primarily to fund the modernization programme at Port of Adria (investment in equipment and machinery) which essentially competed in 2017, and renovation works for Ege Port's shopping mall which completed in H1 2017.

Debt Profile

Net debt at 31 December 2017 decreased to USD 227.5m from USD 280.4m at 2016YE mainly due to cash generated from operations of USD 46.0m, as well as net IPO proceeds of USD 73m and the collection of related party receivable of USD 27.7m. Main cash outflows are CAPEX of USD 13.9m and dividends of USD 46.1m (including interim dividend in September 2017 of USD 18m) and financing-related cash outflow of USD 34.7m (mainly financing expenses and net repayment of gross debt). The Group's Net Debt to Adjusted EBITDA ratio of 3.0x is in line with GPH's financial policy as communicated during the IPO process. The Leverage Ratio as per the Eurobond issued by Global Liman Isletmeleri A.S. (100% subsidiary of GPH) is 4.5x versus a covenant of 5.0x.

Liquidity and IPO

· Global Ports Holding Listed on the London Stock Exchange in May 2017

· Offer Price: 740 pence per GPH share

· Offer size: USD 207m (including USD 7m over-allotment option)

· The Group raised net primary proceeds of USD 73m which will be used to develop and expand the Group's Cruise business

· Free float of 34.37% while GIH and EBRD hold 60.60% and 5.03% respectively

Dividends

Following USD 17.5m interim dividend (21.6p per share) paid in September 2017, the Directors proposed additional dividend of USD 17.5m (20.1p per share at current exchange rate). This would bring total dividend in respect of the year to a USD 35.0m or 41.7p per share.

Segment Review

Cruise Business

FY 2017 Detailed Financial Review - Cruise Segment

1Passenger numbers refer to consolidation perimeter, hence excluding equity pick-up entities Venice, Lisbon and Singapore

In 2017, GPH's consolidated cruise ports welcomed more than 2,801 calls and 4.1m passengers, while it was over 7.0m passengers via 4,214 calls for all ports including equity pick-up entities Venice, Lisbon and Singapore. It generated 43.2% of the company's revenue and 40% of its Segmental EBITDA. 26% of the cruise revenues were derived from ancillary sources such as retail outlets and advertising.

Ports Update

For the FY 2017, Creuers (Barcelona and Malaga) received 868 cruise calls (+9.0% over 2016) bringing in 2.4m cruise passengers (+5.1% yoy), of which 1.3m were turnaround passengers (stable yoy) and 1.1m were transit passengers(+11.9 yoy). Creuers' revenues remained flat at USD 27m, and Segmental EBITDA slightly decreased by 2.6% to 17.6m. The decline in yield of Creuers was mainly due to:

· changes in passenger mix in favor of transit passengers, which are less profitable compared to turnaround passengers

· turnaround passenger increase driven by Malaga, which has lower margins compared to Barcelona

Valletta Cruise Port, with its unique position for West Med and East Med itineraries, contributed significantly to GPH's FY 2017 passenger and Segmental EBITDA performance. In FY 2017, Valletta Cruise Port received 342 cruise calls (+7.9 yoy) bringing in 0.8m cruise passengers (+14.1% yoy), of which 0.2 were turnaround passengers (+89.2% yoy). Segmental EBITDA of the Valletta Cruise Port was up by 216.5% to USD 6.8m, implying a 340bps increase in Segmental EBITDA margin, thanks to the increasing share of turnaround passengers in the passenger mix. In addition, a stronger EUR has also impacted operating figures positively. Meanwhile, lower travel retail has resulted in decline in yield.

In 2017, Ege Port had 130 cruise calls (-53.2% yoy) bringing in 118,954 cruise passengers (-65.8 yoy) and a total of 477 ferry calls bringing in 69,989 ferry passengers with a total of 188,843 (-53.4% yoy) passengers visiting the port. Ege Port revenues and Segmental EBITDA declined by 58.6% and 67.1%, respectively, due to the decline in number of calls and passenger numbers as a result of ongoing weakness in sentiment for Turkish cruise ports. Management remains cautious for 2018 but we are hopeful of seeing a recovery as a number of cruise lines have begun to communicate their plans to visit GPH's Turkish ports in 2018.

Commercial Business

FY 2017 Detailed Financial Review - Commercial Business

GPH operates two growing commercial ports, in Turkey and Montenegro. Together, they handled around 249.4k TEU and 1,628.9k tonnes of throughput in 2017.

In 2017, the commercial port operations generated 56.8% of the company's revenue and 60% of its Segmental EBITDA.

TEU throughput increased by 16.6% in FY 2017 YoY thanks to strong marble export at Port of Akdeniz. TEU yields softened slightly by 5.7% due to changes in TEU mix between full and empty.

General & bulk cargo volume was up 16.2% driven by a solid increase of steel coils export at Port of Adria and growth in cement exports in Port Akdeniz. Due to lower volumes of project cargo in 2017 (which has less visibility by nature) as well as change in product mix led to a decline in the yield, from USD 9.8 to USD 9.0. Revenue growth was below volume growth in 2017, mainly due to lower project cargo volumes. Segmental EBITDA for the Commercial business was USD 48.3m in FY 2017, up 9.7% over FY 2016, translating into c.120bps improvement in Segmental EBITDA margin. The improvement was driven by operational improvement at Port Akdeniz, increase in high-margin TEU business and a favorable currency environment in Turkey.

An agreement has been signed with regards to project cargo in the Port of Adria as contracted project cargo at Port of Adria has not been realized in 2017. And some of the anticipated revenue would be into 2018 (we currently estimate that this could have an EBITDA impact of USD 1.3m) in this financial year.

Principal risks and uncertainties

The Group faces a number of risks, which if they arise, could affect its ability to achieve strategic objectives. The Board is responsible for determining the nature of these risks and ensuring appropriate mitigating actions are in place to manage them effectively.

The level of risk is regulary monitored by the Audit and Risk Committee and reviewed and validated by the Board on an annual basis. The Audit and Risk Committee provides risk reports to the Board on a quarterly basis at least. The Group is exposed to four categories of risks:

1. General Risk

a. The risk of not extending the concessions: The Group operates each of its ports under long-term concession agreements, including BOT agreements, with the state owner of the port. For the ports where the Group does not have the contractual right to extend these fixed-term agreements, it would need to apply for an extension before they expire. Granting these applications would be at the discretion of the state owner of the relevant port, and there can be no certainty that any of the Group's concession agreements will be extended. For mitigation, the Group has in the past taken, and may continue to take, formal legal processes relating to the extension of concession processes. For example, the Group is legally engaged over the renewal of the concession terms for Port Akdeniz, Antalya, Ege Port, Kuşadası and Bodrum Cruise Port, As another example, in Spain, Creuers is entitled to apply for the extension of the Adossat agreement period

b. Complex regulatory environment and changes may affect the Group's business: The Group must satisfy a range of legal requirements, across the countries it operates. Although the Group seeks to continue to comply with all relevant laws, regulations and the terms of its concession agreements, licences and permits, failure to do so could result in significant administrative or civil penalties. Having local management teams, fully conversant with their country and language, and have a detailed knowledge of applicable local regulations, as well as the Group's internal audit practices, the Group reviews if obligations are being met.

c. Reputation risk due to fraud and bribery: GPH has a zero-tolerance policy on corruption of any sort. Anti-Bribery and Corruption Policy is an integral part of the Company's directives and/or policies that have been approved by the Board of Directors. The Group has also adopted a Code of Ethics that is intended to improve service quality, the effective use of resources, prevent unfair competition, organise relationships among employees, and set standards for fraud prevention. Additionally, the Audit and Risk Committee advises the Board on, and reviews, the Company's procedures for detecting fraud and the prevention of bribery and corruption.

d. The risk of not being fully covered by insurance: The Group has actively studied actions that are within its control to pre-empt and mitigate these types of operational risks, which have been formalised into the GPH Security Code and GPH Health, Safety & Environment policy. Both were published in 2017. In addition, the Group carries out a security audit through our internal audit department.

2. Risks relating to the Group's cruise port operations

a. Demand for cruise port services is sensitive to macroeconomic conditions: The Group's cruise port operations depend on consumer demand from cruise passengers, and economic uncertainty and the spending power of these passengers are influenced by factors beyond the Group's control. However, experience has shown that even in the financial crisis in 2007/2008, cruise bookings remained resilient. Holidays are high-priority for many people, and when spending is tight, cruising delivers vacations within a pre-defined budget. Also, cruise lines will go to great lengths to fill their ships, from aggressive price reductions to re-deploying vessels to other regions.

b. Demand for cruise port services can be influenced by trends and perceptions beyond the Group's control such as safety: In order to diversify risks, GPH's expansion strategy includes acquiring marquee ports in other important cruise areas such as the Americas including the Caribbean. As cruise lines diversify into areas with a good safety perception, the Group's aim is that if we lose business in one place, we can regain it in another. This is exactly what happened following turmoil in the Eastern Mediterranean; GPH ports in the Western Mediterranean gained instead. For any ports that have a negative safety perception, GPH has direct contact with cruise lines to show the security measures applied, both in the port and the wider destination.

c. Duty-free and ancillary revenues may be affected by economic or regulatory changes: GPH management actively tracks duty-free operations, including those operated by third parties, and focuses on increasing passenger satisfaction inside the terminals. Refurbishing and refreshing duty-free and other retail areas is a priority. GPH also protects against the effects of decreasing passenger numbers on revenues by agreeing minimum guaranteed rents with third party retail tenants.

d. The Group's cruise ports could face competition, primarily within the Mediterranean: There can be no assurance that long-term changes in cruise itineraries will not result in increased competition in the future. GPH's acquisition strategy has been selective, choosing 'marquee' ports (such as Barcelona, Venice, Lisbon, Kuşadasi and Valletta) which are less susceptible to being replaced by others. These are complemented by GPH's other ports, which enable GPH to offer commercial incentives to cruise lines when they include several GPH ports in the same itinerary.

3. Risks relating to the Group's commercial port operations

a. External factors may affect demand at the Group's commercial ports: central risk mitigation strategy is to diversify the types of cargo we handle, and their destinations. GPH's commercial ports are actively working to identify new cargo types and new customers. Furthermore, the Group's share of imports, particularly in Antalya, is low and the objective is to increase this share through marketing to local customers. Another mitigating factor is that Antalya exports cargo volumes that are abundantly available.

b. Barriers to trade may adversely affect the Group's commercial ports: The normal free-flow of goods can be interrupted by external factors ranging from international trade disputes to restrictions on imports or exports, and mitigation of these risks lies in diversification.

c. The Group's commercial ports may face increased competition: For Port Akdeniz in Antalya, an external risk mitigation is geography, while the hinterland features the largest marble and mining reserves in Turkey.. The nearest ports are Izmir and Mersin / Iskenderun, but they are too far away to compete with Antalya. There is limited leakage to these ports because of high land transportation costs. Port of Adria, is Montenegro's main seaport. The Group does not know of any new port developments, but it monitors closely for proposed plans.

d. Safety and environmental risks specific to cargo handling: Heavy industry such as cargo handling brings attendant risks of accidents, whether to people or to the environment. The safety of people is non-negotiable, and The Group is committed to act with the utmost care in its environments. GPH has been active in raising standards with the creation of a groupwide HSE manual. The Group has also implemented a plan of environmental and social mitigation, prepared in line with EBRD's Environmental and Social Action Plan (ESAP).

4. Risks relating to the Group's investments and strategy

a. The Group may not be able to achieve its growth strategy: The investment universe of GPH, with very limited competition from mainly local players, is extremely wide and diverse in terms of available ports in all regions.

b. The Group is exposed to risks related to integrating new ports: induction process is well established and based on solid experience. The target is to have clear plans on human resources, operations, financial reporting, policies and procedures before the takeover of a port. During the process, the finance, operations and business development departments of the company work in harmony to transfer the best practices to the new business.

c. The risks of additional indebtedness: Management controls the Group's debt levels on a regular basis, using KPIs such as gross debt to EBITDA and net debt to EBITDA. The Group does not have significant capex requirements that would lead to increased indebtedness on its current financials. A high cash conversion rate on operations, with low working capital requirements, has a positive impact on Group indebtedness levels.

Key Corporate Events Post 2017 Year-End

Port of Adria - EBRD Loan Agreement:

Port of Adria signed a loan agreement with EBRD for a total of €20 million to modernize its facilities. The majority of these modernization investments have already been completed. Accordingly this loan will be refinancing those investments and will essentially be net-debt neutral.

In the long term, Port of Adria is aiming to transform its terminals at Montenegro into a hub that can be used as an intermediate destination by trucks travelling between Western Europe and Turkey. The Company is also planning to increase the volume of Serbian cargo as the rail link between Belgrade and the city of Bar is being refurbished.

In addition, Port of Adria is exploring ways to increase the role the port is playing in Montenegro's tourism, a sector which remains constrained by the underdeveloped transport infrastructure.

Director's Responsibility Statement

The responsibility statement below has been prepared in connection with the company's full annual report for the year ending 31 December 2017. Certain parts thereof are not included within this announcement.

We confirm to the best of our knowledge:

the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole;

the strategic report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face; and

the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the company's performance, business model and strategy.

This responsibility statement was approved by the board of directors on 11 March 2018 and is signed on its behalf by:

(*) As set out in note 3, the Group acquired three Italian cruise ports in September 2016 and October 2016. In accordance with IFRS 3 Business Combinations the previously reported provisional acquisition values were finalized during 2017 giving rise to a previously unrecognized gain on bargain purchase of USD 131 thousand and the 2016 financial information has been restated to reflect this gain and the final asset and liability figures.

(*) As set out in note 3, the Group acquired three Italian cruise ports in September 2016 and October 2016. In accordance with IFRS 3 Business Combinations the previously reported provisional acquisition values were finalized during 2017 giving rise to a previously unrecognized gain on bargain purchase of USD 131 thousand and the 2016 financial information has been restated to reflect this gain and the final asset and liability figures.

Consolidated statement of financial position

(*) As set out in note 3, the Group acquired three Italian cruise ports in September 2016 and October 2016. In accordance with IFRS 3 Business Combinations the previously reported provisional acquisition values were finalized during 2017 giving rise to a previously unrecognized gain on bargain purchase of USD 131 thousand and the 2016 financial information has been restated to reflect this gain and the final asset and liability figures.

Consolidated statement of changes in equity

(*) As set out in note 3, the Group acquired three Italian cruise ports in September 2016 and October 2016. In accordance with IFRS 3 Business Combinations the previously reported provisional acquisition values were finalized during 2017 giving rise to a previously unrecognized gain on bargain purchase of USD 131 thousand and the 2016 financial information has been restated to reflect this gain and the final asset and liability figures.

(*) As set out in note 3, the Group acquired three Italian cruise ports in September 2016 and October 2016. In accordance with IFRS 3 Business Combinations the previously reported provisional acquisition values were finalized during 2017 giving rise to a previously unrecognized gain on bargain purchase of USD 131 thousand and the 2016 financial information has been restated to reflect this gain and the final asset and liability figures.

(*) In accordance with IAS 7 'Statement of Cash Flow' the Group has included restricted cash of USD 7,583 thousand (2016: USD 5,953 thousand). The comparative has been restated to be on a consistent basis.

The financial information for the year ended 31 December 2017 contained in this News Release was approved by the Board on 11 March 2018. This announcement does not constitute statutory financial statements of the Company within the meaning of Section 435 of the Companies Act 2006, but is derived from those financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed and adopted for use by the European Union

The information is prepared under the historical cost method except where other measurement bases are required to be applied under IFRS, using all standards and interpretations required for financial periods beginning 1 January 2017. No standards or interpretations have been adopted before the required implementation date. Whilst the financial information included within this announcement has been prepared in accordance with the recognition and measurement critiera of IFRS, it does not comply with all disclosure requirements.

Global Ports Holding PLC is a public company incorporated in the United Kingdom and registered in England and Wales under the Companies Act 2006. The address of the registered office is 100 New Bridge Street, London EC4V 6JA, United Kingdom. Global Ports Holding PLC is the parent company of Global Liman Isletmeleri A.S. and its subsidiaries (the "Existing Group"). The ultimate holding company is Global Yatırım Holding.

On 17 May 2017, the Group completed the initial public offering ("IPO") of its ordinary shares and was admitted to the standard listing segment of the Official List of the Financial Conduct Authority ("FCA") and is trading on the main market of the London Stock Exchange.

As part of a restructuring accompanying the IPO of the Group on 17 May 2017, Global Ports Holding PLC replaced Global Liman Isletmeleri A.S. as the parent company of the Group by way of a Share exchange agreement. Under IFRS 3 this has been accounted for as a group reconstruction under merger accounting. The results for the Group for the period from 1 January 2017 to 31 December 2017 have been presented as if Global Ports Holding PLC was the parent company from 1 January 2017. The prior year comparatives reflect the consolidated results of the Group under Global Liman Isletmeleri A.S.

Statutory financial statements for the year ended 31 December 2017, which have been prepared on a going concern basis, will be delivered to the Registrar of Companies in due course. The auditor has reported on those financial statements. Their report was not qualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

a) Products and services from which reportable segments derive their revenues

The Group operates various cruise and commercial ports and all revenue is generated from external customers such as cruise liners, ferries, yachts, individual passengers, container ships and bulk and general cargo ships.

b) Reportable segments

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision-maker, in deciding how to allocate resources and assessing performance.

The Group has identified each port as an operating segment, as each port represents a set of activities which generates revenue and the financial information of each port is reviewed by the Group's chief operating decision-maker in deciding how to allocate resources and assess performance. The Group's chief operating decision-maker is the Chief Executive Officer ("CEO"), who reviews the management reports of each port at least on a monthly basis.

The CEO evaluates segmental performance on the basis of earnings before interest, tax, depreciation and amortisation excluding the effects of exceptional and other non-cash income and expenses comprising project expenses, bargain purchase gains and reserves, board member leaving fees, employee termination payments, unallocated expenses, finance income, finance costs, and including the share of equity-accounted investees which is fully integrated into GPH cruise port network ("Adjusted EBITDA" or "Segmental EBITDA"). Adjusted EBITDA is considered by Group management to be the most appropriate profit measure for the review of the segment operations because it excludes items which the Group does not consider to represent the operating cash flows generated by underlying business performance. The share of equity-accounted investees has been included as it is considered to represent operating cash flows generated by the Group's operations that are structured in this manner.

The Group has the following operating segments under IFRS 8:

§ BPI ("Creuers" or "Creuers (Barcelona and Málaga)"), VCP ("Valetta Cruise Port"), Ege Liman ("Ege Ports-Kuşadası"), Bodrum Liman ("Bodrum Cruise Port"), Ortadoğu Liman (Cruise port operations), POH, Lisbon Cruise Terminals, LDA ("Port of Lisbon" or "Lisbon Cruise Port"), SATS - Creuers Cruise Services Pte. Ltd. ("Singapore Port"), Venezia Investimenti Srl. ("Venice Investment" or "Venice Cruise Port") and La Spezia Cruise Facility Srl. ("La Spezia") which fall under the Group's cruise port operations.

§ Ortadoğu Liman (Commercial port operations) ("Port Akdeniz-Antalya") and Port of Adria ("Port of Adria-Bar") which both fall under the Group's commercial port operations.

The Group's reportable segments under IFRS 8 are BPI, VCP, Ege Liman, Ortadoğu Liman (Commercial port operations) and Port of Adria. Segments that do not exceed the quantitative thresholds for reporting information about operating segments have been included in Other.

Global Depolama does not generate any revenues and therefore is presented as unallocated to reconcile to the consolidated financial statements results.

Ravenna, Cagliari and Catania (consolidated under POH) were acquired at the end of 2016, therefore they did not generate any revenue for the Group in 2016.

Assets, revenue and expenses directly attributable to segments are reported under each reportable segment.

Any items which are not attributable to segments have been disclosed as unallocated.

b) Reportable segments (continued)

(i) Segment revenues, results and reconciliation to profit before tax

The following is an analysis of the Group's revenue, results and reconciliation to profit before tax by reportable segment:

The Group did not have inter-segment revenues in any of the periods shown above.

b) Reportable segments (continued)

(ii) Segment assets and liabilities

The following is an analysis of the Group's assets and liabilities by reportable segment for the years ended: