The company, which describes itself as ‘the world's largest independent cruise port operator’ though also handles containers and bulk cargos, announced a fresh round of cost cutting and said it can last until 2022 before needing to raise new capital.
A prior phase of cutbacks, taken at the end of April, provided sufficient cash resources for a “severe downside scenario” and would see the busines to remain in operation until April 2021 – this assumed no cruise calls for the remainder of 2020 and a significant (75%) drop in marble shipments through its ports.
GPH described the current volumes of shipments as being significantly better than what is implied in the ‘severe downside scenario’. It also noted that a number of its ports can continue to generate revenues from non-cruise related business – including the handling of military vessels and mega-yachts.
Nonetheless, the company is now executing a significant reduction in employee costs. It is implementing a reduced working week for some plus salary deferrals and the suspension of board salaries and fees until 2021.
“These actions have resulted in cash costs in a no cruise environment being reduced to such an extent that management believe GPH can remain in operation even under a scenario of no cruise ships calling at its cruise ports until 2022,” the company said.
GPH noted that the Creuers operation, in Barcelona, has a ‘survivability’ of around 36 months without cruise business whilst Ege, the Turkish port operation, could last 29 months and in Malta the Valletta port could survive for 20 months.
The company’s other cruise ports spanning the Caribbean, Mediterranean, Adriatic and Asia are meanwhile grouped with survivability estimated at 16 months.
First-quarter financial results, for the three months ended March 31, revealed that the company made a US$16.5mln loss.
It ended March with US$56mln of cash and had US$401.1mln of net debt.
"The Covid-19 crisis continues to cause unprecedented disruption to both global economies and the global travel sector,” said chairman Mehmet Kutman.
“While the crisis means cash preservation is currently the key focus, it is clear that as the cruise industry starts to exit this crisis, significant new port opportunities will present themselves.”
Emre Sayin, GPH chief executive, meanwhile, added: “2020 was the year that the strategy we set at the IPO really started to deliver operational and financial results.
“Our successful expansion into the Caribbean caused a step change in our Cruise operations in Q1.
“Even though the Covid-19 crisis may have derailed this outcome since March, the evidence of this step change can still be seen in our first quarter trading.
“As our commercial ports continue to trade in line with our expectations and there are signs that cruising could slowly start in Q3, management have recently implemented a further cost saving and cash preservation programme to help ensure the business remains in a strong position throughout this crisis.”