Global Ports Takes a Hit as Unrest in Turkey Sinks Cruise Revenues

View of Bodrum harbor on the Turkish Riviera during a hot summer day
Bodrum, Turkey // Photo by monticello/iStock/Getty Images Plus/Getty Images

by Alan Tovey, The Telegraph, August 21, 2017

Political unrest in one of its biggest markets has meant that maiden results from cruise and cargo port operator Global Ports Holding proved a washout.

Shares in the company - which floated in London three months ago - tumbled almost 8pc after revenues from cruise ship passengers fell and its cargo operations managed only modest growth.

Global Ports Holding

GPH operates more than a dozen ports and is focused on increasing revenues from cruise ship passengers transiting through its facilities.

However, chief executive Emre Sayin said that upheaval in Turkey - which over the past year and half has seen a series of terror attacks and a failed coup - had deterred passengers from visiting the country, hitting revenue at the company’s ports there, which are the most profitable in its portfolio.

As a consequence, revenues from cruise operations fell 15.9pc to $18.5m (£14.4m) in the six months to the end of June. Cargo operations fared better, with revenue up 1.6pc to $31.3m, though traders took flight at the performance, which resulted in a pre-tax loss of $6.5m almost three times bigger than the same period a year ago.

"Geopolitical developments have had a negative effect on our Turkish cruise revenues but the commercial sector has performed well,” said Mr Sayin.

“But the outlook for cruises in Turkey remains good in the long term and we have taken the opportunity to invest there while they are quieter.”

He added that he expected GPH to report marginal growth in the second half of the year.

Referring to recent terror attacks in Barcelona, the chief executive said cruises could benefit as passengers look for alternative forms of vacations.

“Cruises are a very controlled environment,” he said. “I don’t think any other part of the travel business is as controlled. The cruise industry is very small in terms of penetration into the travel market as a whole so there is plenty of room to grow.”

GPH listed in mid-May in what the City had hoped would be one of the biggest flotations of the year in London and one which would give a lift to the IPO market. However GPH ultimately priced near the bottom of the range at 740p a share, valuing the business at £460m at the time.

The float was intended to help fund acquisitions of other ports and Mr Sayin is targeting the Caribbean, hinting GPH is close to announcing deals there.

The company ultimately wants to see revenues from cruise passengers overtaking commercial, though the chief executive said recent events could mean this process would take several years.


This article was written by Alan Tovey from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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