Five Questions to Spiros Paschalis, CEO Attica Group
Challenges, new vessels and expansion.
A week ago, Ferry Shipping News was in Greece, giving the opportunity to have a conversation with Spiros Paschalis.
Attica Group consolidates for the first time Hellenic Seaways in the financial statements for the period 1.6.2018-31.12.2018.
Key figures in million €
+34,56% Revenue consolidated 365.4 (271.54)
-4.28% EBITDA 57 (59.55)
++ Income after tax and minority interests 17.11 (1.25)
· The total debt of the Group stood, as at 31st December 2018, at € 346.08mln (€ 238.73mln as at 31st December, 2017) of which long-term borrowings are € 274.50mln (€ 214.43mln) while short-term borrowings stood at € 71.58mln (€ 24.30mln).
· The Group’s total equity as at 31st December, 2018 stood at € 409.18mln, corresponding to € 1.90 per share.
· Completion of refinancing of large part of the group’s debt with significantly lower cost financial results.
· The lower EBITDA margin in 2018 is attributed mainly to the significant increase in fuel price and to the integration cost of Hellenic Seaways Maritime S.A. («HSW»).
Unfortunately in Greek, this article gives some insight into the recent discussions about the possible sale from Attica to Fortress. Some highlights:
Any discussions about the future sale of Attica Group have been frozen for the time being and are expected to restart in the first quarter of 2019.
Now the priority is to finalize the absorption of Hellenic Seaways. In November all ferry companies are obliged by law to submit the ferry routes for next year.
A potential buyer needs to understand what he is buying, and that is only possible when the integration of HSW in the route network becomes clear.
According to the Competition Commission’s, the Attica Group needs to free up space for competition, if it is having a monopoly position on one of the routes.
For example, if a competitor declares to the Competition Commission that he wishes to launch a ship on the same route, then Attica will have to decommission one of the two ships operating there.
For the scenario involving the Grimaldi Group, financial analysts believe that Emanuele Grimaldi will not enter Attica. They believe he just wants Attica to “clean up” the coastal shipping market in order to have pure business logic schemes. For that reason, Emanuele Grimaldi has occasionally described the Attica Group as “one of the best companies in the industry, along with P & O and Stena.”
- Piraeus Bank holds 31.2% of MIG, which is MIG’s parent of Attica Group, holding 89.38% of its shares. Attica Group owns Superfast Ferries, Blue Star Ferries and HSW. Also, part of the Attica Group’s lending belongs to the Fortress investment group, which has the right to convert Attica’s bond loans into shares.
- Piraeus Bank holds 24.18% of ANEK, which is one of the three poles of Greek coastal shipping. It indirectly holds another similar percentage of ANEK together with other banks through pledge on pledge. Also, Piraeus Bank together with other banks converted ANEK’s borrowings into convertible bonds, so it potentially holds another percentage of the company.
- ANEK cooperates with Superfast Ferries on the Adriatic and Crete routes through a consortium.
- Piraeus Bank, like all Greek banks, has signed a three-year agreement with the European Commission’s Directorate-General for Competition to agree that within three years they must have sold all their shares in activities that are not related to banking, such as equity, real estate, insurance, hotels, etc. Sales must be completed by the end of 2018.
- Based on this agreement, the Bank will also have to sell its holdings in the shipping companies. This process began with HSW and will reasonably be followed by Attica Group and ANEK.
- The Grimaldi Group fully controls Minoan Lines.
Mr Grimaldi doesn’t exclude the possibility of his further expansion in Greece, and if Attica would be for sale he would be ready to look at the opportunity that arises.
New Horizons For Attica Group, With The Acquisition Of Hellenic Seaways
Last week Ferry Shipping News paid a visit to Athens and despite being extremely busy, the CEO of Attica Group Mr Spiros Paschalis (photo) made time early in the morning to give us an update on the developments of Attica Group.
Attica’s Annual Report Follows The Green Light For The HSW Take Over
Shortly after the authorisation to get full control over Hellenic Seaways (see below), Attica published its full year annual report.
In spite of increased traffic volumes the group result was affected by the increased bunker prices.
- Consolidated revenue of EUR 271.54m (EUR 268.61m)
- EBITDA EUR 50.36m (EUR 70.03m)
- Profits after tax EUR 1.25m (EUR 20.25m)
- Increased traffic volumes in all revenue categories: passengers +2.2%, cars +5.7% and freight units +3.5%
- Number of sailings +3.3%
The Attica Group has received a gold and two silver honors at the Tourism Awards 2018, held recently in Athens.
These Tourism Awards rewarded the best practices and initiatives of Greek companies and organizations in the tourism sector.
Attica Group won a:
- Gold award for its corporate social responsibility program titled “With you as our destination.
- Silver award for @sea, the first onboard infotainment platform developed in the Greek shipping industry, accessible by any device – laptop, smartphone or tablet – offering information and entertainment.
- Silver award for the SEASMILES reward program.
In its key financial figures for the nine-month period 2017, Attica Group presents the following results:
- Revenues: EUR 215.46 million (status quo)
- EBITDA: EUR 47.75 million (EUR 62.35 million)
- Profit after tax: EUR 4.68 million (EUR 26.50 million)
The lower profit is mainly related to the significantly increased fuel oil price, which is a pity after better results on the transportation side:
- Sailings +1.1%
- Passengers +0.5%
- Private vehicles +3.7%
- Cargo units +1.8%
Approvals from the competent authorities are pending in order for the Company to complete the acquisition of a total 98.83% shareholding stake in Hellenic Seaways Maritime S.A.
The fight for the ownership of Hellenic Seaways (HSW) is over. Attica Holdings and Grimaldi Group have reached an agreement on October 26, where HSW will be almost fully owned by Attica
- Minoan Lines, a Grimaldi Group company, will transfer all its HSW shares (48.53%) to Attica Holdings, for €78.5 million. The latter already became the majority shareholder in August when acquiring 50.3% of the share capital from Piraeus Bank.
- Attica Ferries Maritime Company will sell ro-pax SUPERFAST XII to a company within the Grimaldi Group. Price tag: €74,5 million. The SUPERFAST XII is currently operating on the long route Piraeus – Patmos – Leros – Kalymnos – Kos – Rhodes & Syros – Katapola, for the Blue Star Ferries brand.
- Fast (car) ferry HIGHSPEED 7 will change hands from Hellenic Seaways to Minoan Lines for €25 million. HIGHSPEED 7 operates from Heraklion to Santorini
- The completion of the deal will need to be approved by the Greek competition authority.
This deal is the most logic solution for the control over HSW, where two competitors basically both owned half of the company, with Attica at a small advantage. There was only one way: either Grimaldi, or Attica had to become the sole owner.
Now that Attica fully controls HSW, it will certainly create a high degree of rationalization on the Greek domestic routes. Attica/HSW will have the Aegean, and Grimaldi Group will –via Minoan Lines– have the Crete routes to Piraeus and Santorini / Cyclades. Grimaldi gets money to invest, and gets two modern ships.
Attica/HSW will now be able to reshuffle ships and routes for a better utilization. This economy of scale will be something attractive for investors. The domestic horizon will change, for sure.
It is noteworthy to remember that Attica also has a cooperation with ANEK Lines, on Crete (Heraklion and Chania, the headquarters of ANEK) and in the Adriatic. Could this cooperation develop further? Time will tell.
Part of the deal is the sale of the SUPERFAST XII to a company within the Grimaldi Group. This ro-pax was built in 2002 bij Flender Werft, Lübeck.
Photos © Mike Louagie
On Friday September 29, Attica Group (Blue Star Ferries, Superfast Ferries) published its half-year results.
- • During H1, Attica Group saw an increase in traffic volumes in all categories: Passengers +5.4% / Cars +9.9% / Freight +2.3% / Sailings +4.3%
- Adriatic routes (Patras-Igoumenitsa-Ancona and Patras-Igoumenitsa-Bari (in joint service with ANEK): Passengers +16.8% / Cars +14.2% / Freight +3.5% / Sailings + 2.1%
- Greek domestic routes (Piraeus-Cyclades, Piraeus-Dodekanese, Piraeus- Crete (with ANEK), and Piraeus-Chios-Mytilene): Passengers +4.3% / Cars +9.2% / Freight +1.7% / Sailings +4.8%
- Consolidated Revenue: EUR 112.04m (EUR 109.63m)
- EBITDA: EUR 7.07m (EUR 21.66m)
- Consolidated losses after tax: EUR 22.26m (EUR 2.20m)
- Increase of bunker prices influenced Group’s results by over EUR 15m.
Other highlights:
- On August 11, Attica acquired 50.30% of the share capital of Hellenic Seaways Maritime S.A.
- On August 30, BLUE STAR PATMOS suffered grounding on shallow waters while approaching Ios. The impact is estimated to be limited due to the upcoming low season. The incident is fully covered by the existing insurance, and the vessel is actually being repaired at Elefsina shipyard.
Photo © Mike Louagie