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FESCO optimizes spending by $35 mln in 9M - company head

6 December 2016
FESCO Group has carried out an optimization program and cut spending by $35.1 million, FESCO President Alexander Isurin said during a conference call for analysts on Monday.

Isurin said that the reduction of spending on the fleet amounted to $13.7 million, spending on personnel fell by $8.7 million. Due to the redistribution of export and import flows, the company optimized about $5 million. Spending on office rent and other costs fell by $2.6 million and $5.2 million, respectively.

FESCO's management held a conference call on the company's operating and financial results for the 9M 2016. In connection with the ongoing talks on restructuring FESCO's debt, the company did not comment on issues connected with the process of restructuring.

Earlier the company published its operating and financial results for the 9M 2016. Earnings before interest, taxes, depreciation and amortization (EBITDA) to International Financial Reporting Standards (IFRS) fell by 27.8% to $63.9 million, revenue fell 27.1% to $396.4 million.

Operating profit fell 34.2% to $39.7 million. Revenue without the bunker division fell 15.2% to $392.5 million. EBITDA margin fell by 0.2 percentage points to 16.1%. FESCO's capex rose 2.7% to $15.1 million.

In particular, the revenue from the railway division fell 18.7% to $66.5 million, the port division fell 12.6% to $77.8 million, the line and logistics division fell 13% to $265.1 million, the maritime division fell 32% to $45.3 million, revenue from bunkering fell 84.9% to $15.3 million.

In November FESCO forecast total revenue in 2016 at $541 million and EBITDA at $87 million.

FESCO Group, whose parent company is Far East Shipping Company (FESCO) (MOEX: FESH), is one of the largest owners and operators of port infrastructure in Russia. It is an intermodal operator that manages marine, railway, and automobile transport capacities and stevedoring services at its own terminals at Russian and CIS ports. Ziyavudin Magomedov's Summa Group owns 32.5% of FESCO, GHP Group owns 23.8%, TPG holds 17.4% and East Capital owns 4.9%.

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