Page 57 - GEORptDec19

combines gas purchased for resale (85% of cost of gas) and gas used by Gardabani I power plant, grew 19.6% y/y to $114.5mn.
GOGC’s adjusted Ebitda grew by 21.7% y/y to $36.6mn, supported by strong H1 revenues. This translated into an adjusted Ebitda margin of 22.8% in the half, slightly above last year’s level (22.1% in H1 2018).
But the local currency depreciated by 7% y/y against the dollar during the six months, generating a non-cash FX loss of $16.7mn in 1H19, compared to a $11.2mn gain in 1H18.
After upgrading Georgia’s sovereign rating from BB- to BB in October 2019, S&P Ratings lifted GOGC’s rating from B+ to BB-. The decision was backed by GOGC’s strong financial position (sizeable cash balance, stable earnings and steady cash flows from the electricity segment). In addition, S&P Ratings expected the commissioning of Gardabani II in late 2019 to improve the company’s financial position, after a temporary deterioration of credit metrics (high capex, lower cash balance).
Notably, S&P Ratings has not changed Georgian Railway’s credit rating, leaving it at B+, two notches below that of the government.
9.2.2 ​Transport corporate news
The PACE group, a transportation company in Georgia, announced the construction launch for a new $120mn terminal at the country’s Black Sea port of Poti in the presence of government officials, Agenda.ge informed​. ​The supplementary cargo turnover of the new terminal is expected at 2.5mn tonnes, a small fraction of the controversial large port expansion envisaged by APM Terminals, the operator of Poti port that has overall announced plans to build a “deep water ” port with an annual cargo turnover of 50mn tonnes.
However, the depth of the new PACE terminal planned for the future (15m), qualifies it as a deep-water port. A similar area dedicated to the new terminal (25 hectares) and a “second stage” envisaging deepening the terminal to 15m indicates that this new PACE terminal might actually be the first stage of the deep-water port announced by APM Terminals in direct competition to the port project in Anaklia, further up the Black Sea coast. The government stopped APM Terminal’s direct project for such a deep water port this spring, cancelling a preliminary building permit. The size of the PACE investment and the envisaged capacity indicate that it is rather far from being a real threat to Anaklia project, as things stand so far, though.
PACE group, which operates eight berths and a terminal in Poti port, announced that it has received $50mn in funding from the US Overseas Private Investment Corporation (OPIC), which is the largest investment by OPIC in the Caucasus.
Located over 25 hectares, the new terminal will require dredging work to take place in the harbour to a depth of 12m, which will result in the sea port being able to accept vessels up to 253m in length and with a load capacity up to 50,000 tonnes, PACE said.
After the implementation of the project, the company’s current annual cargo turnover of three million tonnes will be almost doubled.
Georgian Minister of Infrastructure Maia Tskitishvili said that the project would create 500 new jobs.
57​ GEORGIA Country Report​ December 2019 ​ ​www.intellinews.com