JCR Eurasia Rating, in its periodic review, has evaluated the Global Liman İşletmeleri A.Ş. in an investment grade category and affirmed the rating of A-(Trk) on the Long Term National Local Scale with a ‘Positive’ outlook

JCR Eurasia Rating, in its periodic review, has evaluated “Global Liman İşletmeleri A.Ş.” in a high-level investment category at the national level and affirmed its long-term national rating and outlook as ‘A-(Trk) /Positive’. The Company’s Long Term International Foreign and Local Currency Ratings have been affirmed as ‘BBB-’ while other notes and details of the ratings are given in the table below.

Long Term International Foreign Currency

:

BBB- / (Stable Outlook)

Long Term International Local Currency

:

BBB- / (Stable Outlook)

Long Term National Local Rating

:

A- (Trk) / (Positive Outlook)

Short Term International Foreign Currency

:

A-3 / (Stable Outlook)

Short Term International Local Currency

:

A-3 / (Stable Outlook)

Short Term National Local Rating

:

A-1+ (Trk) / (Stable Outlook)

Sponsor Support

:

2

Stand Alone

:

AB

The main shareholder of Global Liman İşletmeleri A.Ş., Global Yatırım Holding A.Ş. invests in the sectors of port management, energy, infrastructure, and finance and has been publicly traded on the Borsa Istanbul (BIST). In November 2015, 10.84% of shares were purchased by the European Bank for Reconstruction and Development (EBRD). Global Liman was established in 2004 to invest in the infrastructure projects of Global Yatırım Holding A.Ş. and increased its efficiency through the acquisition of shares of the operating entities of the Port of Bar in Montenegro, Barcelona Port, Lisbon Cruise Terminals, and Malta (Valetta) in partnership with international firms and has become one of Europe’s largest cruise operators. The Company currently operates 14 ports’ management with a cruise capacity of over 5 million. In addition to its operations of the Kuşadası and Bodrum passenger ports and Antalya commercial and passenger port, the Company has increased its international operations through new acquisitions. Moreover, owing to the services provided to cruise ships and passengers and high market share expanding its activities on a wide geography, the Company has gained flexibility against fluctuations stemming from geopolitical risks.

Factors contributing positively to the determination of the Company’s notes include the continuous contribution of sustainable sales revenue on profitability, position as one of the major players in the cruise ship sector, monopoly-like outlook due to the location of ports, declined concentration risk due to international port operations, relieved liquidity management through expanding funding needs into long term with bonds traded on the Irish Stock Exchange, largely eliminated FX risk, low level of non-performing receivables supporting asset quality, improvements in the field of corporate governance principles following the EBRD partnership, upward trend in net working capital, and sustainability of Company operations via high EBITDA margin. On the other hand, the limitation on equity growth due to the distribution of profit, the volatility on profit and profitability ratios due to high debt ratios, an aggressive acquisition strategy dependent on external resources and pressured leverage level, the limited effect on profitability due to increasing amortizations, rising activity expenses along with growing financing expenses, global risks, fluctuations in risk appetites due to regional tension stemming from political and economic developments, and the risks provided by the current conjecture are all issues stressing the Company’s notes that are taken into account by JCR Eurasia Rating in the affirmation of the Long-Term National Ratings of the Company as ‘A- (Trk) and outlook as ‘Positive’. The International Foreign and Local Currency Ratings of the Company have been restricted at BBB-/ (Stable), which represents the sovereign ceiling. In addition, ongoing international port investments and operational structure spread over a wide range of area and their contribution to the Company balance sheet, access to long term funding resources in order to fund new investments and the attainability of the Company’s future growth plan, and the generation of internal resources and cash flows are the major issues that will be kept under review in the upcoming period.

The main shareholder, Global Holding A.Ş., and EBRD, with a share of 10.84%, are considered to have the willingness and experience to ensure long-term liquidity and equity within their financial capability when required and to provide efficient operational support to “Global Liman İşletmeleri A.Ş.”. In this regard, the Company's Sponsor Support Grade has been upgraded as (2) in JCR Eurasia Rating’s notation, denoting an adequate level.

On the other hand, taking into account the Company’s strong equity level, internal equity generation capacity, asset quality, strong reputation in the sector, geographically widening operational structure, joint ventures with international companies, group synergy, foreign currency income generation capacity, access to long term funding resources and experienced management team, we, as JCR Eurasia Rating, are of the opinion that the Company has reached the level of adequate experience and facilities to manage the incurred risks on its balance sheet regardless of any assistance from the shareholders. Within this context, the Stand Alone grade of the Company has been determined as (AB) in the JCR Eurasia Rating notation system, indicating a high level.

For more information related to the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analyst Ms. Merve HAYAT.

JCR EURASIA RATING

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