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Global Ports Holding Says It Can Trade With No Cruise Ships Until 2022

Global Ports Holding says it can trade with no cruise ships until 2022

Source: PortSEurope
Istanbul, Turkey (PortSEurope) June 10, 2020 – Global Ports Holding Plc (GPH), the world’s largest independent cruise port operator, has today issued a trading update for the period from 1 January to 31 March 2020. The statement includes the entry, “When combined with ongoing trading at the commercial ports, management believes that GPH can continue to trade even under a scenario of no cruise ships
until 2022, without the need to raise capital”. GPH operates commercial cargo activities but is primarily a cruise port operator and the cruise ship business has been taken virtually offline by the Covid-19 coronavirus crisis. Cruise ship companies have regularly pushed back dates for restarting and it is doubtful whether such dates are realistic. Even if cruises are restarted, it is even more doubtful whether there are going to be many passengers willing to board the ships. The coronavirus crisis has led to customer uncertainty about the health aspects of cruises and negative press coverage against cruise companies. The U.S. Department of State has said, “U.S. citizens, particularly travellers with underlying health conditions, should not travel by cruise ship. CDC (Centres for Disease Control and Prevention) notes increased risk of infection of COVID-19 in a cruise ship environment”. Many cruises visit multiple ports in multiple countries, and different rules and travel restrictions for receiving vessels apply, if visits are at all possible. Itineraries will have to be redesigned to meet local conditions. On March 17, the EU closed its borders for 30 days to all non-EU nationals from visiting the bloc, except long-term residents, family members of EU nationals and diplomats, cross-border and healthcare workers, and people transporting goods. In the Mediterranean region, Italy, Montenegro, Portugal, Spain have explicitly banned the visits of cruise ships. Such actions come at a time when Mediterranean port cities are seeking action against the rising number of cruise ships visiting ports, some of which claim that the number of cruise ship visitors is overwhelming their local communities, and in some cases not bringing an equivalent financial benefit. There are also environmental concerns: air pollution from vessels which are often close to city centres and damage to port infrastructure caused by huge water displacement. Below are the GPH cruise port statistics for Q1 2020, which show a collapse in the numbers of passengers as the business came to a halt in March. The figures are skewed by from the new Caribbean port numbers, including Nassau.  Cruise   Passengers (‘000 PAX)Q1 2020  Q1 2019       PAX Change (%)Creuers (Barcelona/Malaga)119252-53%Valletta4078-49%Ege Port1.85.1-66%Nassau8340n/aOther Cruise Ports25817448%Total Cruise Ports1,253506146% Here is the GPH table on ports’ “Survivability in months”: Cruise Port Operations in a no cruise environmentSurvivability in months*Creuers36Ege29Valletta20Other Cruise16Cruise20 GPH has taken further action to reduce the cost base and conserve cash, and operating expenses across the group have now been reduced by 75% for May to Dec 2020, generating a full year 2020 operating expenses reduction of 60%. Total cruise revenue rose by 102% YoY to $11.0m ($11.1m ccy) for the period vs $5.4m in Q1 2019. Passenger volumes rose 146% YoY to 1.25m, driven by the first time contribution from new Caribbean ports. Copyright (C) PortSEurope. All Rights Reserved. 2020.

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