Global Ports Regulatory News (GPH)

Global Ports Holding Plc

Preliminary results for the twelve months ended 31 March 2023

Global Ports Holding Plc (“GPH” or “Group”), the world’s largest independent cruise port operator, today announces its unaudited results for the year ended 31 March 2023 (‘Reporting Period’).

Mehmet Kutman, Co-Founder, Chief Executive Office and Chairman, said:

“Our cruise operations have returned to, and have in fact now exceeded, pre-pandemic activity levels. We are delighted with the performance in the Reporting Period and are very pleased with our strong start to the 2023 cruise season.

The outlook for the cruise industry is strong and GPH is well positioned to be a key enabler and beneficiary of its continued growth and success in the years ahead.”

Key Highlights

Balance Sheet

At 31 March 2023 IFRS Gross Debt was USD 672.4 million (Ex IFRS-16 Leases Gross Debt: USD 612.3 million), compared to Gross Debt at 31 March 2022 of USD 598.6 million (Ex IFRS-16 Leases Gross Debt: USD 534.7 million).

The main drivers for the increase in Gross Debt were the partial drawdown (USD 38.9 million) of the USD 75 million growth facility under the Sixth Street loan to finance the Ege Port concession extension, additional loans and bonds to finance the expected CAPEX for recent European acquisitions (Malta bond, and bank loans at Tarragona Cruise Port and Canary Island Cruise Ports, combined USD 25.4 million), in addition to accrued (PIK) interest under the Sixth Street loan, partially offset by scheduled loan amortizations.

Net debt Ex IFRS-16 Leases was USD 494.0 million at the end of the Reporting Period compared to USD 435.0 million as at 31 March 2022. At 31 March 2023, GPH had cash and cash equivalents of USD 118.2 million, compared to USD 99.7 million at 31 March 2022.

The additional Gross Debt incurred by way of additional loans and bonds described above had no material impact to Net Debt in the Reporting Period as the funds remained on balance sheet as cash as at 31 March 2023 and have been invested shortly after the end of the Reporting Period (Ege Extension) or will be invested (debt raised for European expansion). The main driver of the increase in Net Debt during the Reporting Period was cash capital expenditure of USD 78.5 million, the majority of which was for the ongoing investment into Nassau Cruise Port, partially offset by operating cash flows of USD 61.3 million, reflecting the growth in Adjusted EBITDA.

Nassau Cruise Port Re-financing

Shortly after the end of the Reporting Period, Nassau Cruise Port successfully refinanced its local bond issued in June 2020. The refinancing resulted in an increase in the nominal outstanding amount to USD 145 million (from USD 134.4 million) and a reduction in the fixed coupon to 6.0% (from 8.0%), reducing the annual interest payment by USD 2.0 million. The maturity date of 2040 remains unchanged as does the principal repayment schedule which is ten equal annual payments from June 2031. The bond remains non-recourse to GPH or any other Group entity.

Ege Port, Kusadasi Concession Extension

Shortly after the end of the Reporting Period, GPH reached an agreement to extend its concession agreement for Ege Port, Kusadasi. The original concession agreement was due to expire in July 2033, and following this extension agreement the concession will now expire in July 2052.

In exchange for the extension of the existing concession agreement, Ege Port has paid an upfront concession fee of TRY 725.4 million (USD 38 million). In addition, Ege Port has committed to invest an amount equivalent to 10% of the upfront concession fee within the next 5 years to improve and enhance the cruise port and retail facilities at the port, and will pay a variable concession fee equal to 5% of its gross revenues during the extension period starting after July 2033.

The up-front concession fee payment and related expenses have been financed by partial utilisation, shortly before the end of the Reporting Period, of the USD 75 million growth facility provided by Sixth Street, previously announced on 24 May 2021 and approved by shareholders on 9 June 2021. As part of this additional USD 38.9 million draw down, GPH has issued further warrants to Sixth Street representing an additional 2.0% of GPH’s fully diluted share capital (in addition to the warrants issued at financial closing in July 2021 equivalent to 9.0% of GPH’s fully diluted share capital).

The upfront concession fee has been funded by a capital increase at Ege Port. This capital increase was provided by GPH only. As a result, GPH’s equity stake in Ege Port has increased to 90.5% (from 72.5%).

Malta bond issuance

Shortly before the end of the Reporting Period, GPH, through a 100% owned SPV in Malta, issued EUR 18.1 million of unsecured bonds due 2030 with a fixed coupon of 6.25% per annum. These bonds are guaranteed by GPH, and the proceeds will be used to partially finance GPH’s investment plans for recent cruise port acquisitions in Europe.

Subordinated shareholder loans

During the last two years GPH has received additional, long-term funding support from its largest shareholder Global Investment Holding AS (“GIH”) in the form of subordinated shareholder loans to finance project expenses for expansion projects, debt service and general corporate purposes.

As of the end of the Reporting Period, the total amount of subordinated shareholder loans received from GIH is USD 24.9 million, an increase of USD 21.9 million during the Reporting Period. These funds have helped support the continued expansion of the Group while cruise operations were significantly impacted by Covid.

Strategic review and financing

In May 2021, GPH entered into a five-year, senior secured loan agreement for up to USD 261.3 million with Sixth Street. This financing provided for two term loan facilities, consisting of an initial five-year facility of USD 186.3 million and an additional five-year growth facility of up to USD 75 million (of which USD 38.9 million has been drawn down as of 30 June 2023). As part of this financing, GPH has issued warrants to Sixth Street representing a total of 11.0% of GPH’s fully-diluted share capital. The warrants will become exercisable by Sixth Street upon certain specific events, including the acceleration, repayment in full or termination of the loan, de-listing of GPH or a change of control.

In January 2023, GPH announced that it was undertaking a strategic review of the Group’s current capital and financing structure including considering a range of potential corporate activity including strategic investments, joint ventures and new partnerships, for the purpose of exploring ways to maximise value for all stakeholders.

As part of this review, GPH has engaged advisors and is in advanced discussions with rating agencies regarding a private rating assessment for the prospective issuance of further debt instruments by the Group, targeting an investment grade rating. The main purpose of the prospective financing would be to prepay the Sixth Street financing in order to reduce financing costs and extend the maturity of this debt, as well as provide capital for further growth. There can be no certainty what final credit rating will be achieved, and with respect to the terms, timing or implementation of any refinancing. Further details will be provided when it is appropriate to do so.

Outlook

The scheduled launch of new cruise ships in the year ahead means the number of available berths across the global cruise fleet will reach all-time highs in 2024 and, when combined with industry occupancy rates reaching pre-Covid-19 levels, the industry will be propelled to exciting new highs.

Industry booking patterns have been rebuilt to market norms over the last 12 months, and all major cruise lines have reported record booking trends for 2023.

Looking further into the future, long-established demand and supply trends in the cruise industry have re-established themselves as key drivers of cruise industry growth. According to Cruise Industry News, by the end of 2027, passenger capacity in the cruise industry is forecast to grow to over 40 million, a growth rate of 45% from pre-Covid levels.

The medium to long-term demand trends have been largely unaffected by Covid-19. The growing appetite for leisure travel, if anything, has perhaps increased.

Cruise ports have to invest significantly in their infrastructure to meet the needs of the growing number of cruise ships and the growing size of cruise ships as well as the increased demand from passengers for an improved cruise port experience. Those requirements have re-emerged even stronger, as the anticipated growth in the industry brings exciting prospects and potential risks for those involved in the cruise port industry. Cruise ports will face some substantial obstacles due to the growing size of cruise ships and the continued growth and segmentation of the passenger base.

GPH’s significant experience and know-how in port and destination development and global cruise port operations, honed from our experiences worldwide, means we are well-positioned to play a primary role in both this investment and industry growth in the years ahead.

Our inorganic growth aspirations continue and we expect to add San Juan Cruise Port and St Lucia Cruise Port to the network in the 2024 Reporting Period with additional opportunities under review.

For the Reporting Period to 31 March 2024 and for the current portfolio of cruise ports, we currently expect, based on confirmed booking requests made by our cruise line partners, that we will welcome 11.8 million passengers to our consolidated and managed cruise port portfolio.

Current trading for the 2024 Reporting Period (12 months to 31 March 2024) is broadly in line with current market expectations forecasts.

Notes - For full definitions and explanations of each Alternative Performance measure in this statement please refer to the section at the end of this document

For further information, please contact:

A copy of this report will be available on our website www.globalportsholding.com today from 0700hrs (BST).

Chairman and CEO Statement

During the Reporting Period, we welcomed the continued easing and eventual lifting of global travel restrictions, the steady return of the global cruise fleet to sailing, and a consistent increase in cruise passenger volumes as occupancy rates rose. By the end of the Reporting Period, our journey to recovery was complete. We welcomed 9.2 million passengers at our consolidated and managed ports in the Reporting Period, with 2.5 million passengers handled in the three months to 31 March 2023, compared to a previous high for this period of 1.8 million.

By the end of the Reporting Period, we had achieved a number of significant milestones for the Group:

• Welcomed 9.2 million cruise passengers across our consolidated and managed portfolio

• Nassau Cruise Port had several days of hosting six cruise ships simultaneously and welcomed over 28,000 passengers in a single day. In May 2023 the port hosted its grand opening party, welcoming over 500 local and industry partners to experience new upland facilities and the fantastic experience that now awaits cruise passengers at the port

• Seven new cruise ports added to our network, including our first in North America

• Concession agreement signed for San Juan Cruise Port and a MoU for St Lucia Cruise Port

• Shortly after the end of the Reporting Period, we extended our concession for Ege Port, Kusadasi, by 19 years

The scheduled growth in the global cruise fleet in the year ahead will drive available berth capacity across the industry to new highs and with strong forecast growth for the global cruise fleet and 11.8 million passengers expected at our consolidated and managed ports in the 2024 Reporting Period, we look towards the future with confidence.

Significant Expansion

Inorganic growth is a core component of our strategy, and we remain very focused on the continued successful delivery of our inorganic growth strategy. We believe that the growth and size of our network and our unrivalled experience and success in investing and transforming cruise port infrastructure makes GPH the demonstrable market leader in cruise port development.

Cruise ports are facing both exciting prospects and potential challenges due to the growing number and capacity of cruise ships. Many ports current infrastructure cannot support the growing size of the latest cruise ships or the anticipated influx of passengers that the higher ship capacities will bring. As a result, many cruise ports will need to make significant infrastructure investments if they want to remain competitive and relevant. This need for investment into port infrastructure and the benefits to all stakeholders of the adoption of global best practice is a significant driver of GPH’s pipeline of new port opportunities.

The impact of this growth and expansion of the industry was seen throughout our port network in a series of records during the Reporting Period. Nassau Cruise Port has hosted a record six cruise ships simultaneously and, in February 2023, welcomed a record 28,554 cruise passengers in a single day. Zadar Cruise Port, Croatia, hosted a record four cruise ships in a single day, and Ege Port, Kusadasi in Türkiye, welcomed Odyssey of the Seas, the largest-ever cruise ship to call at a Turkish port. Kalundborg Cruise Port, Denmark, hosted AIDAnova, the largest ship to ever call at the port.

At the start of the Reporting Period, Tarragona Cruise Port, Spain joined the network following the signing of a 12-year concession with a six-year extension option. Through a 50/50 joint venture with local partners, we started non-exclusive cruise port operations at Vigo Cruise Port, Spain, under a concession agreement that currently runs until the end of 2024.

In the Canary Islands, Spain our 80:20 joint venture between GPH and our local partner Sepcan S.L., signed concessions agreements for three ports in the Reporting Period. We signed 20-year concessions for Fuerteventura Cruise Port and Lanzarote Cruise Port and a 40-year concession for Las Palmas Cruise Port. Our Spanish operations expanded further when the same joint venture signed a 15-year concession for Alicante Cruise Port.

In addition, we signed a 30-year concession agreement in August 2022 for one of the largest cruise ports in the Caribbean, San Juan Cruise Port, Puerto Rico. Closing of this concession is expected in the 2024 Reporting Period for what is a strategically important port in the Caribbean. San Juan Cruise Port is perfectly positioned to be included in both Eastern Caribbean and Southern Caribbean itineraries, and its airport and hotel infrastructure, combined with the fact that Puerto Rico is a US territory, means it is also an attractive and popular homeport destination. In October 2022, a Memorandum of Understanding was signed for a 30-year concession, with a 10-year extension option, for the cruise port of St Lucia.

Board and management

In May 2022, Emre Sayin, Chief Executive, stepped down from his role to pursue new business opportunities. At this time, I took on the Chief Executive role. I want to thank Emre on behalf of the Board of Directors for his commitment and leadership throughout his tenure at GPH.

Aborted takeover

As reported in our 2022 Annual Report, on 15 June 2022, GPH confirmed that it had received an approach regarding a potential cash offer for all of the shares in the Company by SAS Shipping Agencies Services Sarl (SAS), a wholly owned subsidiary of MSC Mediterranean Shipping Company. On 12 July 2022, GPH’s Board of Directors announced that it had terminated these talks, and SAS confirmed that it did not intend to make an offer for GPH.

Sustainability

GPH has always strived to be a good corporate citizen. We take care to minimize the environmental impact of our operations. We work closely with local stakeholders and engage with local charities to raise funds and support our local communities. The safety, health and wellbeing of our people is of paramount importance to the Board and senior management.

We recognize that we face a climate crisis and there is an urgency to act and for everyone to play a role in transitioning to a low-carbon economy and sustainable business operations. Therefore, we are formalizing our sustainability strategy, including setting and reporting on goals and targets.

We are taking steps to accelerate our sustainability journey. We acknowledge the need to implement the Task Force on Climate-related Financial Disclosures (TCFD) requirements by next year’s Annual Report. As a first step, we have created a sustainability working group from across the organization and have appointed independent sustainability consultants to help us on our sustainability journey. During the 2024 Reporting Period, we will undertake our first assessment using the TCFD framework and plan to publish our first report aligned with TCFD requirements in the Group’s 2024 Annual Report.

While this will formalize our sustainability strategy, we continue to work on a range of exciting projects, such as those to increase our use of solar power at our ports. During the Reporting Period, our redevelopment at Nassau Cruise Port was selected by Seatrade Cruise as a finalist in the Sustainability Initiative of the Year category. This project includes several substantial eco-friendly design elements, including the production of 1.5 MW of solar power, full facility LED lighting, low water usage plans, full facility recycling plans, and incorporation of new green space into the downtown core. At the same time, we have worked closely with the local population to create direct and indirect employment opportunities, including providing training to local vendors.

In addition to GPH’s direct environmental impact, we continue to work with governments and local authorities on projects to help facilitate the introduction of low-carbon fuel or power at our ports. In Malta, Infrastructure Malta and Transport Malta’s EUR 50 million project to introduce shore power at Valletta Cruise Port, is due to complete soon and is expected to reduce emissions in the Grand Harbour by 90%. In Tarragona our investment plans will see us invest in the building of a new state-of-the-art modular cruise terminal which will utilise solar power to ensure the sustainable provision of the terminal's energy needs.

I look forward to reporting on the progress of our sustainability strategy and journey in our 2024 Annual Report.

The Future

The outlook for the global cruise industry has perhaps never been stronger. The global cruise fleet is now fully re-deployed, occupancy rates are generally back above 100%, and many cruise lines have broken booking records for the 2023 season.

Looking further into the future, the global cruise industry’s medium to long-term structural growth dynamics has been largely unaffected by Covid-19. The current cruise ship order book indicates that by the end of 2027, passenger capacity across the industry will have grown to over 40 million, a growth rate of 45% from pre-Covid levels.

We expect this growth will be a key driver of positive organic growth at GPH over the medium to long term as passenger volumes rise across our port network. Most significantly, we believe that this growth increases the need for cruise ports to invest in their facilities to accommodate the growth in passenger volumes.

GPH’s significant experience and know-how in port and destination development, destination marketing and global cruise port operations means we are well-positioned to play a pivotal role in the continued development and growth of the global cruise industry. We look forward to the future with excitement and optimism.

Operational Review

Given the strong performance of the Group and the continued growth in the number of ports in the network, it was decided during the Reporting Period to restructure the group’s segmental financial reporting. GPH will now report by geographic segment, which matches our organisational structure.

Americas

GPH's operational performance in the Americas in the Reporting Period includes GPH's two Caribbean ports, Antigua Cruise Port and Nassau Cruise Port, as well as Prince Rupert, Canada, which was added to the network during the Reporting Period, but did not welcome its first cruise call until after the end of the Reporting Period.

Trading in the Americas region improved strongly, with passenger volumes of 4.4 million for the Reporting Period compared to just 1.5 million in the prior Reporting Period.

Nassau Cruise Port benefitted from its proximity to the key home ports in Florida and the cruise lines' near-term desire to operate a higher volume than normal of short cruises in this area at the expense of longer itineraries to other parts of the Caribbean. This decision helped Nassau Cruise Port report a 196% increase in cruise passengers to 3.8 million.

Nassau Cruise Port, on some days, is now hosting six cruise ships simultaneously, utilising the new berthing that was created as part of our significant investment into the port. On the 27 February 2023, the port welcomed a record 28,554 passengers in a single day.

Our investment in the transformation of Nassau Cruise Port continued throughout the Reporting Period. Our vision for this iconic port is becoming a reality, and we believe this port will stand as a testament globally to our cruise port and destination development capabilities. Due to the major US cruise lines focusing on short cruises close to the Southern US home ports throughout the Winter 2022/23 cruise season, the recovery rate in passenger volumes at Southern Caribbean cruise ports was less strong. For GPH, this meant Antigua Cruise Port's cruise operations recovered at a slower pace than that experienced by Nassau Cruise Port. Cruise passenger volumes at Antigua Cruise Port of 556k in the Reporting Period were up 135% from the 237k during the prior Reporting Period.

Our Americas operations achieved a milestone in the last year with the signing of our first cruise port concession in North America. Signing a 10-year concession, with a 10-year extension option, for Prince Rupert Cruise Port in British Columbia, Canada, is an important step in our continued growth.

Prince Rupert Cruise Port is located at the heart of the British Columbian cruise market, just 40 miles from Alaska, one of the largest cruise markets in the world, and ideally placed for cruise itineraries to and from the key homeports in the region: Seattle and Vancouver.

Prince Rupert Cruise Port is expected to welcome nearly 80,000 passengers over the 2023 Alaskan summer cruise season. The port has the infrastructure and capability to handle larger ships, and GPH expects to drive a significant increase in passenger volumes in the years ahead.

In August 2022, GPH signed a 30-year concession agreement for San Juan Cruise Port, Puerto Rico. In October 2022, a Memorandum of Understanding was signed for a 30-year concession, with a 10-year extension option, for the cruise port of St Lucia. We expect to welcome these ports into our network during the fiscal year 2024 Reporting Period.

West Med & Atlantic

GPH's operational performance for the West Med & Atlantic region includes our Spanish ports Barcelona, Fuerteventura, Lanzarote, Las Palmas, Malaga, and Tarragona, as well as Kalundborg, Denmark, and the equity pick-up contribution from Lisbon and Singapore. Alicante Cruise Port will start to contribute in the 2024 Reporting Period.

Overall passenger volumes were 2.9 million, an increase of 440% compared to the comparable Reporting Period. This strong performance was despite the fact that, at the start of the Reporting Period, the recovery in passenger volumes in this region was negatively impacted by the uncertainty around the omicron variant during the important 2022 booking season and the lower onboard capacity limits set by the cruise lines as they ramped up operations early summer 2022.

The easing of travel restrictions as the Reporting Period progressed led to increased cruise activity across our West Med & Atlantic region. Call volumes, particularly at Barcelona, the largest port in the Mediterranean, were strong and by the end of 2022 season close to 2019 levels. However, occupancy rates, which rose steadily throughout the Reporting Period, remained below industry norms. The major cruise lines expect occupancy to fully recover ahead of the summer season 2023.

Barcelona Cruise Port welcomed Virgin Voyages’, Valiant Lady, for its inaugural homeporting season. Kalundborg Cruise Port, Denmark, marked a milestone during the Reporting Period when it welcomed AIDAnova, the largest ship to ever call at the port.

The West Med & Atlantic network grew its cruise port footprint further during the Reporting Period. At the beginning of the Reporting Period, Tarragona Cruise Port joined the network after we signed a 12-year concession with a 6-year extension option. This port recently underwent a EUR 30 million investment into the port infrastructure by the port authority, including a new cruise pier and the provision of shore power. Under the terms of the concession agreement, GPH will invest into building a new state-of-the-art modular cruise terminal expected to cost around EUR 5.5 million, which will utilise solar power to ensure the sustainable provision of the terminal's energy needs.

We added three new ports to the network when GPH's 80:20 joint venture with a local partner signed concession agreements in the Canary Islands: Las Palmas Cruise Port (40 years), Lanzarote Cruise Port (20 years) and Fuerteventura Cruise Port (20 years). As part of the agreements, the joint venture will invest approximately EUR 42 million into constructing a new cruise terminal in Las Palmas and modular terminal facilities in Lanzarote and Fuerteventura. These three cruise ports handled 1.5 million cruise passenger movements in 2019, compared to 0.8 million passengers handled since the takeover late in 2022, a period which was characterized by the recovery towards pre-pandemic levels, ramp-up phase by GPH and only partially covered the main winter season.

Shortly before the end of Reporting Period, we added Alicante Cruise Port, Spain, when we signed a 15-year cruise port concession with the same partner and the same joint venture structure as in the Canary Island.

Central Med

Our Central Med region includes Valletta Cruise Port, Malta, GPH's four Italian ports (Cagliari, Catania, Crotone and Taranto) and the equity pick-up contribution from La Goulette, Tunisia and Venice Cruise Port, Italy.

Trading in this region was similar to that experienced in the West Med & Atlantic region, with cruise calls rising strongly compared to the prior Reporting Period but with lower than-normal occupancy levels. Like with the West Med, occupancy levels rose as the Reporting Period progressed.

The Central Med region, driven by Valletta Cruise Port, GPH's largest port in this region, welcomed 1.0 million passengers in the Reporting Period, a significant increase from the 328k passengers welcomed in the comparable period but 26% lower than the 1.4m welcomed in the 12 months to March 2020.

The work to complete the EUR 49.9 million Grand Harbour clean air project in Valletta is progressing well. Infrastructure Malta and Transport Malta are funding this project, which includes a EUR 37 million investment to provide shore power to five cruise ship quays and is expected to complete shortly. We were delighted when Valletta Cruise Port was awarded "World's Best Cruise Terminal for Sustainability" by the World Cruise Awards.

Elsewhere, we extended the concession at Cagliari, at no cost, by two years and Taranto Cruise Port was awarded Destination of the Year at the Seatrade Cruise Awards.

We were delighted when La Goulette Cruise Port, welcomed the return of cruise passengers during the Reporting Period. After a seven-year break, this was an important moment for La Goulette Cruise Port, the country of Tunisia and all of our local stakeholders.

East Med & Adriatic

GPH's East Med & Adriatic operations include the flagship Turkish port Ege Port in Kusadasi, as well as Bodrum Cruise Port, Türkiye and Zadar Cruise Port, Croatia. In this region, the impact on passenger volumes of lower than-normal occupancy levels was outshone by the significant increase in cruise calls compared to the comparable Report Period.

Passenger numbers in the East Med & Adriatic region were 905k, a significant increase from the 21k welcomed last fiscal year and the 351k in the 12 months to March 2020. This strong recovery in passenger volumes was driven by the performance of our Turkish ports.

In 2017, our Turkish ports suffered a sharp drop in passenger numbers due to geo-political issues. In early calendar year 2020, bookings from the cruise lines indicated that Ege Port would report a strong recovery in passenger volume numbers. Unfortunately, the onset of the Covid-19 pandemic meant this expected recovery did not materialise.

Despite the lower-than-normal occupancy levels across the industry in the Reporting Period, the pent-up demand to return to cruising to Turkish ports drove the strong performance in the East Med & Adriatic region.

During the Reporting Period, Ege Port, Kusadasi welcomed Odyssey of the Seas, the largest ever cruise ship to call at a Turkish port. Zadar hosted a record four ships simultaneously. These achievements further underpin the expected growth across the industry in terms of the number of cruise ships in the global cruise fleet and the size of those ships.

On the 6 February 2023, an earthquake in east of Turkiye caused significant damage to buildings and infrastructure and caused a humanitarian crisis. The earthquake had no impact to our Turkish cruise ports or the communities they are located in, but we opened our cruise ports in Turkiye to help support the relief efforts. The ports were utilised as logistics centers and provided temporary accommodation for some of the victims. In all of our destinations, we set up an earthquake relief campaign in collaboration with local and international NGOs at our ports.

Other

Our Other reporting segment includes our commercial port, Port of Adria, Montenegro, our management agreement for Ha Long Cruise Port, Vietnam and the contribution from our new Port Services Businesses.

Our Ancillary Port Services are services aimed at enhancing cruise passengers’ overall experience in the port and destination. These new Ancillary Port Services include services such as provision of shore services, stevedoring, waste removal, and luggage / passenger screening services, and are provided by Shore & Balearic Handling and other entities under GPH Destination Services.

We are focused on growing our Ancillary Port Services at GPH-operated cruise ports as well as ports operated by third parties.

For example, during the Reporting Period we provided a range of Port Services to Virgin Voyages’ ships at Spanish ports. At Barcelona, we provided and managed an encompassing range of services directly or via third parties, including stevedoring, port agency and crew services. We also provide services at our ports in Málaga and Lisbon and an additional four non-GPH Spanish and Portuguese ports. This agreement is an exciting development and an important first step in our ambitions to grow our Ancillary Port Services revenues.

As a result of the change to our segmental financial reporting, we no longer report Port of Adria’s performance separately, reflecting our strategic focus on cruise operations and the fact Port of Adria’s EBITDA contribution to the Group is small. The Board of Global Ports Holding continues to consider its options regarding Port of Adria, including its potential sale.

Financial Review

The Company generated adjusted revenue of USD 117.2 million, a significant increase on the USD 40.3 million in the prior Reporting Period. This increase was driven by the significant pick-up in cruise activity and cruise passenger volumes across our network during the Reporting Period, with 9.2 million passengers in the Reporting Period compared to 2.54 million in the prior Reporting Period.

Group revenue for the Reporting Period was USD 213.6 million (2022: USD 128.4 million). This includes USD 96.4 million of IFRIC 12 construction revenue, which means the expenditure for certain construction activities, primarily Nassau, is recognized as operating expenses and added with a margin to the Group’s revenue. IFRIC 12 construction revenue and margin has no impact on cash generation and is excluded from Segmental EBITDA.

Adjusted EBITDA, which reflects the performance from our ports less unallocated Holdco expenses, was USD 72.7 million compared with just USD 7.0 million in 2022. This increase in Adjusted EBITDA was driven by the increase in cruise activity in the Reporting Period and our continued control of costs.

Passenger volumes, Adjusted revenue and Adjusted EBITDA represent new record levels for the Company’s cruise business thanks to our ongoing organic and inorganic growth – and despite the fact that the Reporting Period was a transition period recovering from Covid-19 impact.

After depreciation and amortization of USD 27.3 million (2022: USD 28.5 million), including USD 19.7 million (2022: USD 20.7 million) of port operating rights and right of use asset amortization, and specific adjusting items of USD 12.9 million (2022: 10.7 million), the Group reported an Operating profit for the Reporting Period of USD 28.2 million, compared to an Operating loss of USD 29.7 million in the prior Reporting Period. After net finance costs of USD 42.0 million (2022: USD 11.8 million), the loss before tax was USD 9.5 million (2021: USD 43.9 million).

Cruise activity

Given the strong performance of the Group and the continued growth in the number of ports in the network, it was decided during the Reporting Period to restructure the Group’s segmental reporting. Our commercial port operations no longer report separately as the overall contribution to Group performance is not material. GPH now reports by geographic segment, which matches our organizational structure of Regional Directors. The new reporting segments are Americas, West Med & Atlantic, Central Med, East Med & Adriatic and Other.

During the Reporting Period, as Covid-19 travel restrictions were removed, the global cruise fleet returned to sailing, significantly increasing activity levels at GPH cruise ports. Occupancy rates on-board cruise ships, which were relatively low at the start of the Reporting Period, increased steadily as cruise lines rebuilt forward bookings and took a measured approach to increasing on-board occupancy, which generally increased the longer a ship has been back at sea.

By the end of the Reporting Period, volume-weighted average occupancy levels had recovered to close to normal levels across the industry. At GPH, occupancy levels at our consolidated ports in April 2022 were just 67%, this rose to 98% by the end of the third quarter, and in March 2023 it was 104.5%.

Trading across all our regions improved strongly over the Reporting Period. However, trading in the Americas region was particularly strong. The timing of the peak Caribbean cruise season during winter 2022/23 primarily drove this. There was more time for bookings in the Americas to be rebuilt following the removal of travel restrictions over the summer of 2023 compared to the Mediterranean cruise region during the Reporting Period.

Turkish ports, in particular Ege Port, in the East Med & Adriatic region experienced a significant increase in passenger volumes in the Reporting Period. This reflects the easing of travel restrictions and the long-awaited recovery to normal trading at these ports, which Covid-19 has delayed.

Segmental EBITDA for the Reporting Period was USD 80.0 million compared with USD 12.9 million in the 2022 Reporting Period. Revenue per passenger (or overall yield) was USD 12.7 in the Reporting Period. The stand-out performance came from our East Med & Adriatic Region, with a yield of USD 26.6. Ancillary yield per passenger varied significantly across the regions. On a consolidated level the Ancillary yield of GPH reached USD 2.3 during the Reporting Period with a wide range from below USD 1 to above USD 6.

We believe that over time we can increase the ancillary yield at newly acquired ports towards those of the more established ports in our network, driving an increase in the overall passenger yield on a like-for-like basis.

EBITDA margin recovery

Our extensive use of outsourcing through third parties and contractors to manage the volume-related work across our cruise ports means that our cost base has low fixed costs and is inherently flexible.

Thanks to this flexibility, a share of our costs, automatically expands and contracts in line with activity levels. Furthermore, during the pandemic, we took action to reduce our fixed costs. As activity levels have recovered at our cruise operations, this increased activity is being managed on a lower cost base than before the pandemic.

As a result, our Group Adjusted EBITDA margin increased from 17.4% in the prior Reporting Period to 62.0%, which was in line with the historically achieved 60% plus EBITDA margins.

The strong and improved profitability of the Company at normalizing passenger volumes was clearly evident. Adjusted Revenues increased by USD 76.9 million compared to the previous Reporting period, whereas Adjusted EBITDA increased by as much as USD 65.7 million – more than 85% of the additional revenue was turned into operational profitability.

Unallocated expenses

Unallocated expenses, which consist of Holding Company costs, were USD 7.3 million for the Reporting Period compared with USD 5.9 million for the prior Reporting Period. This increase was primarily driven by a normalization of business activity, such as marketing and travel expenses, as activity picked up across our cruise operations, as well as increased personnel expenses.

Adjusted EBITDA

Adjusted EBITDA for the Reporting Period, reflecting the EBITDA performance of our ports, less unallocated expenses, was USD 72.7 million. This compares with Adjusted EBITDA of USD 7.0 million in the prior Reporting Period.

Depreciation and amortization costs

Depreciation and amortization of USD 27.3 million (2022: USD 28.5 million), including USD 19.7 million (2022: USD 20.7 million) of port operating rights and right of use amortization. The difference is driven by lower depreciation and amortization at our European ports due to the weaker EUR to USD exchange rate, offset by the higher amortization and depreciation at Nassau Cruise Port, reflecting the first full year of depreciation for the main marine works completed during the prior Reporting Period.

Specific adjusting items

During the Reporting Period, specific adjusting items were USD 12.9 million compared with USD 10.7 million in the prior Reporting Period. This increase was primarily the result of increased project expenses of USD 11.2 million in particular for expansion projects (vs. USD 7.9 million in the prior Reporting Period), offset by lower impairment losses.

Finance costs

The Group’s net finance charge in the Reporting Period was USD 42.0 million compared with USD 11.8 million in the prior Reporting Period.

This was driven primarily by lower finance income due to lower foreign exchange gains, which were USD 3.4 million in the Reporting Period, compared to USD 20.6 million and the one-off gain of USD 3.8 million on the refinancing of the Eurobond in the prior Reporting Period, partially offset by USD 1.6 million higher interest income on cash balances.

Finance costs rose to 47.7 million from USD 36.9 million. This was primarily because of higher interest expense on loans and borrowings of USD 37.4 million, compared to USD 21.7 million in the prior Reporting Period. This is mainly due to interest expenses at Nassau Cruise Port where, in line with the partial completion of construction, the interest is partially expensed and not fully capitalized anymore.

Net interest expense on a cash basis was USD 31.3 million vs. USD 36.2 million in the prior Reporting Period.

Taxation

The Group’s effective tax rate was 18.4% for the Reporting Period compared to 19.4% in the prior Reporting Period. GPH is a multinational group and is liable for taxation in multiple jurisdictions worldwide.

Despite the significantly lower loss before tax of USD 9.5 million, the Group reported stable tax expense of USD 1.0 million compared to a USD 0.6 million tax expense in the prior Reporting Period.

The Group pays corporate tax due to specific components being profitable and because losses created on other components cannot necessarily be utilized at the consolidated level. On a cash basis, the Group’s income taxes paid amounted to USD 1.4 million compared to USD 0.2 million in 2022.

Investing activities

Capital expenditure during the Reporting Period was USD 100.9 million, compared to 94.6 million in the prior Reporting Period. Most of this expenditure was focused on our continued commitments to invest in Nassau Cruise Port. In the Reporting Period, we invested USD 98.1 million in the Americas with the vast majority of this investment is focused on the upland works at Nassau Cruise Port.

On a cash basis and including the impact of advances in the current and prior Reporting Periods the net investments into acquisition of assets (CAPEX) amounted to USD 78.5 million compared to USD 108.3 million in the prior Reporting Period.

Ege Port, Kusadasi Concession Extension

Shortly after the end of the Reporting Period, GPH reached an agreement to extend its concession agreement for Ege Port, Kusadasi, by additional 19 years to July 2052. A capital increase at Ege Port has funded the upfront concession fee of TRY 725.4 million (ca. USD 38 million) related to this extension. This capital increase was provided by GPH only. As a result, GPH’s equity stake in Ege Port has increased to 90.5% (from 72.5%).

In addition, Ege Port has committed to invest an amount equivalent to 10% of the upfront concession fee within the next five years into improving and enhancing the cruise port and retail facilities at the port, and will pay a variable concession fee equal to 5% of its gross revenues during the extension period starting after July 2033.

The up-front concession fee and related expenses has been financed by GPH‘s partial utilization in an amount of USD 38.9 million of the USD 75 million growth facility provided by Sixth Street. As part of the additional drawdown, GPH has issued further warrants to Sixth Street representing an additional 2.0% of GPH’s fully diluted share capital (in addition to warrants issued at financial closing in July 2021 equivalent of 9.0% of GPH’s fully diluted share capital). The drawdown of growth financing occurred shortly before the end of the Concession Period, whereas the extension was completed shortly thereafter.

Cash flow

The Group generated an Adjusted EBITDA of USD 72.7 million in the Reporting Period, compared to USD 7.0 million in the prior Reporting Period.

Operating cash flow was USD 61.3 million, compared to a negative USD 9.4 million in the prior Reporting Period. This improvement primarily reflects the substantial increase in Adjusted EBITDA, supported by the positive impact of working capital of USD 2.5 million (vs. negative USD 5.2 million prior Reporting Period), offset by other operating outflows in the Reporting Period of USD 14.4 million, which primarily reflects project expenses included in specific adjusting items and correction for the cash impact of the profit from equity-accounted investees.

Working capital was impacted by an increase in short-term payables to the Nassau contractor by USD 13 million offset by the payment of payables and expense accruals of major Project expenses as of 31 March 2022. Eliminating these one-offs, the working capital movements would have been a negative, low single-digit USD million figure reflecting the build-up of working capital during the normalization of business activities during the Reporting Period.

Net interest expense of USD 31.3 million (net of interest received) reflects the cash costs of the outstanding gross debt, the decrease compared with the USD 36.2 million reflects mainly the fact that for most of the Reporting Period interest on the Sixth Street loan was accruing as PIK interest. Net capital expenditure (net of advances used or paid) of USD 78.5 million, primarily reflects the continued investment in Nassau Cruise Port.

Debt

Gross debt at 31 March 2023 was USD 672.4 million compared with USD 598.6 million at 31 March 2022. Excluding IFRS 16 finance leases, gross debt at 31 March 2023 was USD 612.3 million compared with USD 534.7 million at 31 March 2022.

Shortly before the end of the Reporting Period, GPH, through a 100% owned special purpose vehicle (SPV) in Malta, issued EUR 18.1 million of unsecured bonds due 2030 with a fixed coupon of 6.25% per annum. GPH guarantees these bonds, and the proceeds will be used to partially finance GPH’s investment plans for recent cruise port acquisitions, mainly in Europe.

Also shortly before the end of the Reporting Period the Company partially drew down on the growth facility under the Sixth Street loan (USD 38.9 million) to finance the Ege Port concession extension and related expenses.

The main drivers for the increase in Gross Debt were the partial drawdown of the growth facility under the Sixth Street loan (USD 38.9 million) to finance the Ege Port concession extension and related expenses, additional loans and bonds to finance the expected CAPEX for recent European acquisitions (Malta bond, and bank loans at Tarragona Cruise Port and Canary Island Cruise Ports, combined USD 25.4 million), in addition to accrued (PIK) interest under the Sixth Street loan, partially offset by scheduled loan amortizations.

Net debt excluding IFRS 16 Leases was USD 494.0 million at 31 March 2023 compared with USD 435.0 million at 31 March 2022. The additional Gross Debt incurred in additional loans and bonds described above had no material impact on Net Debt in the reporting Period as the funds remained on the balance sheet as cash as at 31 March 2023 and have been invested shortly after the end of the Reporting Period (Ege Extension) or will be invested (debt raised for European expansion). The increase in net debt is primarily driven by CAPEX at Nassau Cruise Port from the prefunded debt and equity capital raised, offset by the positive operating cash flow.

GIH, the majority shareholder of the Company, has provided long-term, subordinated shareholder loans which as of 31 March 2023 amounting to USD 24.9 million, an increase of USD 21.9 million during the Reporting Period, to finance project expenses, debt service and general corporate purposes. These funds have helped support the continued expansion of the Group while cruise operations and debt capacity were significantly impacted by Covid and existing financial agreements.

Capital commitments

Shortly after the end of the Reporting period, GPH has completed the aforementioned extension process for Ege Port investing ca. USD 38.0 million to extend the concession from 2033 to 2052.

The work to transform Nassau Cruise Port, which has been the primary driver of our increased borrowings over recent years, is now largely completed. The remaining cash CAPEX expected at Nassau Cruise Port during the 2024 Reporting Period is around USD 20 million.

Global Ports Canary Islands S.L. (‘GPCI’), our 80:20 joint venture between GPH and local partner, Sepcan S.L., is scheduled to invest over the next two Reporting Periods approximately EUR 42 million into constructing new cruise terminals and modular terminal facilities at our three Canary Island Ports. Debt financing for this project is in advanced stages with a Spanish bank and a debt funding ratio of 75% is expected. The equity contribution will be shared with the local partner on a pro-rata basis.

Also in Spain, we plan to invest approximately EUR 5.5 million into building a new state-of-the-art modular cruise terminal at Tarragona Cruise Port. The debt financing for this project is already secured from a local bank and fully disbursed in form of a long-term loan amounting to EUR 3.95 million.

Nassau Cruise Port Refinancing

Shortly after the end of the Reporting Period, Nassau Cruise Port successfully refinanced its local bond issued in June 2020. The refinancing resulted in an increase in the nominal outstanding amount to USD 145 million inter alia because of the refinancing of accrued interest and transaction expenses (from USD 134.4 million) and a reduction in the fixed coupon to 6.0% (from 8.0%), reducing the annual interest payment by USD 2.0 million. The maturity date of 2040 remains unchanged, as does the principal repayment schedule, which is ten equal annual payments from June 2031. The bond remains non-recourse to GPH or any other Group entity.

Financial Review

GLOSSARY OF ALTERNATIVE PERFORMANCE MEASURES (APM)

These financial statements includes certain measures to assess the financial performance of the Group’s business that are termed “non-IFRS measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are calculated using financial measures that are not calculated in accordance with IFRS. These non-GAAP measures comprise the following;

Segmental EBITDA

Segmental EBITDA calculated as income/(loss) before tax after adding back: interest; depreciation; amortization; unallocated expenses; and specific adjusting items.

Management evaluates segmental performance based on Segmental EBITDA. This is done to reflect the fact that there is a variety of financing structures in place both at a port and Group-level, and the nature of the port operating right intangible assets vary by port depending on which concessions were acquired versus awarded, and which fall to be treated under IFRIC 12. As such, management considers monitoring performance in this way, using Segmental EBITDA, gives a more comparable basis for profitability between the portfolio of ports and a metric closer to net cash generation. Excluding project costs for acquisitions and one-off transactions such as project specific development expenses as well as unallocated expenses, gives a more comparable year-on-year measure of port-level trading performance.

Management is using Segmental EBITDA for evaluating each port and group-level performances on operational level. As per management’s view, some specific adjusting items included on the computation of Segmental EBITDA.

Specific adjusting items

The Group presents specific adjusting items separately. For proper evaluation of individual ports financial performance and consolidated financial statements, Management considers disclosing specific adjusting items separately because of their size and nature. These expenses and income include project expenses; being the costs of specific M&A activities , the costs associated with appraising and securing new and potential future port agreements which should not be considered when assessing the underlying trading performance and the costs related to the refinancing of Group debts, the replacement provisions, being provision created for replacement of fixed assets which does not include regular maintenance, other provisions and reversals related to provisions provided, being related to unexpected non-operational transactions, impairment losses, construction accounting margin, being related to IFRIC 12 computation and main business of the Group is operating ports rather than construction, employee termination expenses, income from insurance repayments, income from scrap sales, gain/loss on sale of securities, other provision expenses, redundancy expenses and donations and grants.

Specific adjusting items comprised as following,

(*) This figure composed of expected impairment losses on receivables, provision expenses excluding vacation pay and replacement provisions, impairment losses related to assets and impairment losses on receivables of Equity accounted investees.

Adjusted EBITDA

Adjusted EBITDA calculated as Segmental EBITDA less unallocated (holding company) expenses.

Management uses Adjusted EBITDA measure to evaluate Group’s consolidated performance on an “as-is” basis with respect to the existing portfolio of ports. Notably excluded from Adjusted EBITDA, the costs of specific M&A activities and the costs associated with appraising and securing new and potential future port agreements. M&A and project development are key elements of the Group’s strategy in the Cruise segment. Project lead times and upfront expenses for projects can be significant, however these expenses (as well as expenses related to raising financing such as IPO or acquisition financing) do not relate to the current portfolio of ports but to future EBITDA potential. Accordingly, these expenses would distort Adjusted EBITDA which management is using to monitor the existing portfolio’s performance.

A full reconciliation for Segmental EBITDA and Adjusted EBITDA to profit before tax is provided in the Segment Reporting Note 2 to these financial statements.

Underlying Profit

Management uses this measure to evaluate the normalised profitability of the Group to exclude the specific non-recurring expenses and income, non-cash foreign exchange transactions, and adjusted for the non-cash port intangibles amortisation charge, giving a measure closer to actual net cash generation, which the directors’ consider a key benchmark in making the dividend decision.

Underlying Profit is calculated as profit / (loss) for the year after adding back: amortization expense in relation to Port Operation Rights, non-cash provisional income and expenses, non-cash foreign exchange transactions and specific non-recurring expenses and income.

Adjusted earnings per share

Adjusted earnings per share is calculated as underlying profit divided by weighted average per share.

Management uses these measures to evaluate the profitability of the Group normalised to exclude the gain on reversal of provisions, non-cash provisional income and expenses, gain or loss on foreign currency translation on equity, unhedged portion of investment hedging on Global Liman, adjusted for the non-cash port intangibles amortisation charge, and adjusted for change in accounting policies, giving a measure closer to actual net cash generation, which the directors’ consider a key benchmark in making the dividend decision. Management decided this year that in the light of a more meaningful presentation of the underlying profit, the unhedged portion of the investment hedge on Global Liman and any gain or loss on foreign currency translation on equity have been excluded.

Underlying profit and adjusted earnings per share computed as following;

(*) This figure composed of employee termination expense, replacement provision, and provisions / (reversal of provisions) under specific adjusting items.

Net debt

Net debt comprises total borrowings (bank loans, Eurobond and finance leases net of accrued tax) less cash, cash equivalents and short term investments.

Management includes short term investments into the definition of Net Debt, because these short-term investment are comprised of marketable securities which can be quickly converted into cash.

Net debt comprised as following;

Leverage ratio

Leverage ratio is used by management to monitor available credit capacity of the Group.

Leverage ratio is computed by dividing gross debt to Adjusted EBITDA.

Leverage ratio computation is made as follows;

CAPEX

CAPEX represents the recurring level of capital expenditure required by the Group excluding M&A related capital expenditure.

CAPEX computed as 'Acquisition of property and equipment' and 'Acquisition of intangible assets' per the cash flow statement.

Cash conversion ratio

Cash conversion ratio represents a measure of cash generation after taking account of on-going capital expenditure required to maintain the existing portfolio of ports.

It is computed as Adjusted EBITDA less CAPEX divided by Adjusted EBITDA.

Hard currency

Management uses the term hard currency to refer to those currencies that historically have been less susceptible to exchange rate volatility. For the year ended 31 March 2023 and 2022, the relevant hard currencies for the Group are US Dollar, Canadian Dollar, Euro, Denmark Krona and Singaporean Dollar.

Global Ports Holding PLC and its Subsidiaries

Consolidated statement of profit or loss and other comprehensive income

The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements.

Consolidated statement of financial position

The accompanying notes are an integral part of these financial statements.

Consolidated statement of changes in equity

The accompanying notes are an integral part of these financial statements.

Consolidated cash flow statement

The accompanying notes are an integral part of these financial statements.

1  Basis of preparation

Global Ports Holding PLC is a public company listed on the standard segment of London Stock Exchange incorporated in the United Kingdom and registered in England and Wales under the Companies Act 2006. The address of the registered office is 35 Albemarle Street 3rd Floor, London W1S 4JD, United Kingdom. The majority shareholder of the Company is Global Yatırım Holding.

These consolidated financial statements of Global Ports Holding PLC (the “Company”, and together with its subsidiaries, the “Group”) for the year ended 31 March 2023 were authorised for issue in accordance with a resolution of the directors on 7 July 2023.

These condensed Financial Statements for the year ended 31 March 2023 have been prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority. They have been prepared in accordance with UK adopted International Financial Reporting Standards (“IFRSs”) but do not comply with the full disclosure requirements of these standards. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2023 or 31 March 2022.

Statutory financial statements for the year ended 31 March 2023, 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

Accounting policies

The accounting policies adopted of these Condensed Financial Statements are consistent with those described on pages 134 – 154 of the Annual Report and Financial Statements for the year ended 31 March 2022.

The adoption of the amendments which are effective from 1 April 2022 has had no impact on the Group’s consolidated financial position or performance of the Group as per management analysis performed.

Going concern

The Group operates or has invested in 27 ports in 14 different countries and is focusing on increasing its number of cruise ports in different geographical locations to support its operations and diversify economic and political risks. As a consequence, the Group management believes that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook.

The principal events and conditions identified by the Group that have the most significant impact on the going concern of the Group are:

As of the date of this report, Cruise operations have essentially reached normal activity levels pre-Covid 19, following the closing of cruise operations in March 2020. Adhering to the initial forecast with a slow acceleration after the restart of operations late in 2020 in Europe and in the second quarter of 2021 in the Caribbean, cruise passenger numbers have increased gradually and as of Q4 financial year 2023 (January to March 2023), passenger levels have reached the same level as during the comparative period in the calendar year 2019 (pre Covid).

Management is in close contact with its banking partners related to its current financial liabilities; covenant compliance for Port of Adria has been waived and postponed until early 2024.

During the year, the Group entered into new long-term financings to fund committed CAPEX for recent European acquisitions. Maturities of the new financing arrangements and current debts are mid-to long term. Considering the regular business cycle, pre-Covid EBITDA levels and cash conversion ratio of the Group, the repayment of the financing through operational cash flows is expected.

Group management believes that the Group is well placed to manage its financing and other business risks satisfactorily and have a reasonable expectation that the Group will have adequate resources to continue in operation for at least 12 months from the signing date of these consolidated interim financial statements. They therefore consider it appropriate to adopt the going concern basis of accounting in preparing the financial statements.

2 Segment reporting

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.

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 presents its operations on a regional basis, with each key region representing an individual operating segment with a set of activities which generate revenue, and the financial information of each region is reviewed by the Group’s chief operating decision-maker in deciding how to allocate resources and assess performance. The segment assessment of the Group has changed during the fiscal year as a result of structural changes and concentration of the investment of the Group to Cruise operations and vertical integration of additional services within the Cruise business. The Group has identified four key regions it operates as segments; these are West Mediterranean, Central Mediterranean, East Mediterranean and Americas. The Group’s chief operating decision-maker is the Chief Executive Officer (“CEO”), who reviews the management reports of each region 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 specific adjusting 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 investments which are 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:

The Group’s reportable segments under IFRS 8 are West Med, Central Med, East Med, Americas, and Other.

Global Liman, Global Ports Europe, GP Melita, GP Netherlands, Global Depolama, GPH Americas, GP Malta Finance, GPH Cruise Port Finance and GPH Bahamas do not generate any revenues and therefore is presented as unallocated to reconcile to the consolidated financial statements results.

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.

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

(*) Please refer to glossary of alternative performance measures (APM).

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

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