Page 61 - GEORptAug22

Separately, it faced growing competition from budget airlines and feuded with TAV Urban Georgia, a Turkish corporation operating the two main airports in Georgia, over airport fees.
The coup de grace came the following year, when the COVID pandemic grounded planes around the world. The airline’s sales listing reported that in 2019 it carried about 500,000 passengers, about 10% of the passengers who travelled in and out of Georgia. By 2021, according to the Georgian Civil Aviation Agency, it carried under 73,000 passengers, about 3% of the country’s total.
9.2.3 TMT corporate news
Eurobond recall from Georgian internet provider Silknet ‘highly likely in Q2 2022’
Georgian internet provider Silknet’s performance improved considerably in Q2, boosted by a faster than expected recovery of the Georgian economy and a gradual revival of tourism, Galt&Taggart reports.
The company generated GEL 197.8mn (+6.9% y/y) in revenue and GEL 100mn (+4.5% y/y) EBITDA in H1 (excluding IFRS 16). Mobile data continued to drive growth in H1, however favourable results were also seen in other segments. Namely, fixed broadband revenue was up 1.5% y/y, while pay-TV revenue was up 5.0% y/y on the back of increased ARPUs. Notably, Silknet lagged behind Magticom in new customer acquisitions in the fixed broadband and pay TV segments, explained by Magticom’s aggressive strategy to penetrate rural areas.
Despite a strong performance in terms of revenue, the company’s profitability margins slightly deteriorated in H1, with an adjusted EBITDA margin at 53.9% in H1 2021 vs 55.2% in H1 2020. This decline stemmed from increased electricity tariffs, FX-related increases in operating expenses and higher salaries. On a positive note, Silknet’s leverage declined from 2.98x as of Dec-2020 to 2.83x by end June 2021, supported by the GEL’s appreciation against the USD. Notably, from July 1, retail price regulation has been abolished, giving flexibility to existing mobile operators to adjust tariffs when needed.
Silknet’s $200mn eurobond, which is callable from 2 April 2022 (at 105.5%), was trading at 109.06% of par for an YTM of 7.0% as of Sep-21. At this pricing level, it is highly likely that Silknet will recall its eurobonds in Q2 2022.
9.2.4 Healthcare corporate news
EBRD extends €25mn loan to private operator Georgian Healthcare Group amid pandemic
The European Bank for Reconstruction and Development (EBRD) has agreed to provide a $25mn loan to LSE-listed Georgian Healthcare Group (GHG), Georgia's largest, integrated healthcare services, pharmacy and medical insurance provider.
The financing was approved as part of the development bank's response to the coronavirus (COVID-19) pandemic, the EBRD said.
The loan is to finance GHG's short-term working capital and spending deemed critical amid the COVID-19 pandemic.
According to an official statement from the EBRD, GHG has an important state-aligned role in the fight against the health emergency. The company has adapted six large hospitals to meet needs of virus-infected patients in line with World Health Organization (WHO) guidelines.
The financing will support the implementation of COVID-19 testing at the country’s most advanced medical laboratory, at Megalab. It is also funded by the EBRD.
61 GEORGIA Country Report August 2022 www.intellinews.com