Grand Harbour Marina announces 64% increase over 2008 profits

Details about the annual financial results were announced by Lawrence Zammit, Chairman of Grand Harbour Marina during the Annual General Meeting held today at the Westin Dragonara Resort in St Julian’s.

“Notwithstanding the fact that the yachting industry has been negatively impacted by the economic environment, the Board of Directors, in line with its stated objective to strengthen the fundamentals of the business, sought to increase revenue and continue to contain costs. In fact, total revenue increased from €1,478,512 for 2008 to €2,053,407 for 2009, an increase in revenue which is attributable to an increase in tariffs, increased occupancy, pontoon fees and ancillary revenue. And although no new berth sales were registered in 2009, we are now beginning to see evidence of clients’ willingness to commit to berth acquisitions,” Zammit said.

Operating costs for 2009 were €1,900,805 compared to €2,403,746 for 2008. This has resulted in an increase in earnings before interest, tax, depreciation and amortisation of 64% from €93,241 to €152,602.

During December 2009, it was confirmed by the Inland Revenue that long-term super-yacht berth licensing agreements which took place on or after 1 November 2005 and which give effect to transfer of rights over immovable property are subject to a final withholding tax of 12% on the consideration received. This results in a reduction in the tax liability of Grand Harbour Marina p.l.c. for the years to 31 December 2008, previously estimated on the basis of taxable income brought to tax at the rate of 35%, of €1,233,367.

The decrease in total assets to €11,175,188 at 31 December 2009 from 31 December 2008, € 11,867,771, is mainly related to decrease in cash and cash equivalents, trade receivables and depreciation. The decrease in total liabilities to €5,788,302 at 31 December 2009 from 31 December 2008, €7,304,098, is mainly related to the decrease in the bank loan and company tax. As a result the value of net assets as at 31 December 2009 has increased by €823,213.

“Our pontoon berths have remained at full occupancy, and the waiting list of clients seeking berths has been maintained. Our berth rental pricing was increased once more in 2009. Berthing rates in Malta remain materially below those of similar marinas in other EU countries. During 2009, GHM also managed a number of berths located in Dockyard Creek on behalf of the Malta Maritime Authority,” Zammit added.

Referring to Grand Harbour Marina’s bond issue at the beginning of this year, Zammit explained how in January 2010 the Company issued €12,000,000 of bonds, bearing interest at a rate of 7%, redeemable in 2020 and subject to an early redemption option that may be exercised by the Company between 2017 and 2020. “Our intentions in issuing the bond are in line with those communicated at the time of our Initial Public Offer in 2007. During February 2010 we exercised our option and prepaid our term loan facility with HSBC Bank p.l.c. and we shall be considering further waterside and landside investments within the Marina itself and within Malta as well as considering options to co-invest with Camper & Nicholsons in existing and new investment marinas outside of Malta with a focus on the Mediterranean.”

In a concluding comment about the future outlook, Mr Zammit said “the global economic climate continued to exert a negative impact on our activity, especially in the area of berth sales, even if there still exists a shortage of berths when compared to demand. This is why we will continue to strive to make the Company profitable before taking into account berth sales. We shall continue seeking windows of opportunity presented by the current scenario such that we render more value to the Company’s shareholders in the coming years.”