Global Ports in the doldrums as cruises shun Turkey

Unrest in Turkey spurred a near-tripling of first-half pre-tax losses at Global Ports Holding after a decline in cruise ships docking at its ports in the country.

Shares in the port operator, which floated in May and counts Peter Mandelson, the Labour peer and former EU trade commissioner, as a board member, closed down 10 per cent on Monday on the news.

Passenger numbers at GPH's port in Kusadasi, a resort town in western Turkey, sank 63 per cent in the six months to June 30 compared with the same period last year. The slump came after cruise operators switched routes to visit Greek islands instead of Turkish destinations, the company said on Monday.

This was "unexpected" and driven by a "negative perception of Turkey among foreign tourists" because of "geopolitical tension", GPH said.

Turkey's tourism industry has struggled as a result of terrorist attacks and political instability, including an attempted coup, that have deterred holidaymakers from visiting the country. This month tour operator Tui said security-conscious tourists were shying away from travel to north Africa and the eastern Mediterranean in favour of core European destinations.

Emre Sayın, chief executive, remained bullish, however, saying that GPH planned to expand its number of ports through acquisitions in the Caribbean and Asia, and so reducing "the significance of our Turkish cruise port operation to our overall business".

He added: "Our M&A pipeline of international cruise ports remains strong with progress being made on a number of our target acquisitions." The company raised £58m in its flotation, some of which was intended to finance acquisitions.

GPH reported half-year pre-tax losses of $6.5m, up 179 per cent on a year earlier, as revenues slipped 6 per cent to $49.8m. The group said profit margins were relatively high at the Turkish ports, and that the decline there was offset by higher passenger numbers at its other ports and a strong performance at its commercial business.

The company was pushed to a loss by its $10.9m of net finance costs, up 4 per cent on a year earlier, which mainly comprised interest on its $215m of net debt. The company was also hit by $3m in expenses related to its IPO.

Revenues from cruise operations were down 15.9 per cent year on year to $18.5m, while the cargo business fared better, revenue rising 1.6 per cent to $31.3m in the six months.

The group said it expected a recovery in Turkish cruise passenger numbers only in the "midterm" and that it had a "cautious" outlook for the remainder of the year.

GPH started as the operator of Port Akdeniz, a general commercial port in Antalya, Turkey. But it has developed rapidly as a holder of concessions to operate cruise terminals at facilities in Turkey and eight other countries including Portugal, Italy and Singapore.

It is majority owned by the Turkish company Global Investment Holdings and has a free float of 34 per cent.

The shares closed at 612p, giving GPH a market cap of £385m.

Source: Global Ports in the doldrums as cruises shun Turkey