Global Ports Holding’s (GPH) first half trading update demonstrated the continued recovery in the cruise industry with a four-fold increase in revenue and a swing back into profit taking Cruise EBITDA back to pre-Covid levels.
The company, the world’s largest cruise port operator, reported a leap in adjusted revenue to US$64mln from US$14.8mln while adjusted EBITDA of US$40.4mln compared to a loss of US$0.5mln this time last year.
Shore Capital, which is house broker to GPH, said the outlook is encouraging with the majority of the global cruise fleet now sailing and occupancy levels continuing to build.
Consistent with guidance from the major cruise groups Shore expects passenger numbers to return to pre-Covid levels in calendar 2023, despite the weakening macro-outlook.
Occupancy levels are close to 100% in the Caribbean, although they continue to lag for European cruises, it pointed out.
The broker forecast profitability will build materially at GPH as the market recovers and as new ports contribute.
“We forecast full year 2024 EBITDA of over US$90m, with Cruise EBITDA expected to more than double from full year 2019, valuing the group at 7x EBITDA, a material discount to similar infrastructure plays.”
“GPH is emerging from the pandemic with a much higher quality portfolio, greater geographical balance, long-dated concessions and funding secured to take advantage of this structural growth market” the broker commented.
Shore estimated the existing port network merited an 11-13x forward EBITDA multiple, consistent with similar travel infrastructure plays such as airports which could value the group’s existing and new concessions at well over US$1bn – or after debt, overheads and minorities at c400p per share.
“This is before the potential to secure new ports, with the group having recently signed a 30-year concession for San Juan Cruise Port in Puerto Rico” it said.