Переключить на русский
8 (800) 23-444-99
Russia toll free number
MY FESCO
Authorization
Invalid login filled
Please enter your login
Invalid password
Please enter your password
Publications by period
.
News and events

Results for the six-month period ended June 30, 2015

28 August 2015
FESCO Transportation Group (MOEX: FESH) today announces its operational and consolidated financial results as per IFRS for six-month period ended June 30, 2015.

1H 2015 Highlights

  • FESCO increased its market share on the export-import sea container service lines through the Russian Far East  to 45.9%.
  • FESCO remains the largest port operator in the Far East basin by import container handling with market share of 34.7%.
  • The macroeconomic environment put pressure on FESCO container volumes. In order to address the market headwinds, the Group continues to successfully implement its cost-cutting initiatives with targeted effect of approximately $40 mln in 2015.
  • Group EBITDA margin increased by 2.3 pp YoY in 1H2015 as cost reductions mitigated the impact of the decline in revenue.
  • CAPEX was down from $36.3m in 1H2014 to $9.1m in 1H2015.

Operational overview

  • In 1H2015, FESCO Rail Division was outperforming the market both in container and general cargo segments:
    • Rail cargo load increased by 1.0% YoY to 10.0 million tons (versus 1.5% YoY market decline)
    • Rail container transportation decreased by 2.3% YoY to 143.9 thousand TEU (versus 9% YoY market drop).
  • FESCO port and liner container volumes were down in line with negative market trend:
    • Container handling at VMTP was down by 28% YoY to 174.6 thousand TEU
    • Export-import liner volumes were down by 16,8% YoY to 168.4 thousand TEU
    • Intermodal transportation was down by 8,9% YoY to 107 thousand TEU.
  • General cargo volumes at the port decreased by 17.2% YoY to 1,055 thousand tons in 1H2015.

FESCO operational results for 1H 2015

1H2014 1H2015 Dynamics
Intermodal freight transportation (TEU) 117,474 107,042 -8.9%
Export-import sea sontainer trade (TEU) 202,542 168,436 -16.8%
Domestic sea container trade (TEU) 28,154 26,930 -4.3%
VMTP container throughput (TEU) 242,612 
174,570 -28.0%
VMTP non-container cargo throughput (excluding vehicles) (thousand tons) 1,275 1,055 -17.2%
Rail container transportation («RusskayaTroyka» and «Transgarant») (`000 TEU) 147,3 143,9 -2.3%
Rail cargo load (million tons) 9.9 10.0 +1.0%
Rail cargo turnover (billion ton-kilometers) 15.4 19.5 +26.6%

Financial overview

Group’s financial results were affected by declining transportation volumes and RUB depreciation, but cost-control measures and conversion of export-import tariffs in port from RUB to USD support the profitability.

  • In 1H2015, Group’s consolidated revenue decreased by 25.3% YoY to $383.4m. Consolidated EBITDA decreased by 13.4% to $62.7m.
  • Group EBITDA margin increased by 2.3 pp YoY in 1H2015 as cost reductions mitigated the impact of the decline in revenue.
  • In RUB terms revenue in 1H2015 was up by 23.2% YoY to RUB 22,103m, while EBITDA was up by 44.6% YoY to RUB 3,663m.
  • CAPEX was cut back close to maintenance level and amounted to $9.1m in 1H2015 (down by 74.9% YoY).

Group Financial Results

$ million 1H 2014 1H 2015 Yoy
Dynamics
Revenue 513.1 383.4 -25.3%
EBITDA1 72.4 62.7 -13.4%
   EBITDA margin 14.1% 16.4% +2.3 pt
CAPEX 36.3 9.1 -74.9%


RUB million 1H 2014 1H 2015 YoY
Dynamix
Revenue 17,947.0 22,102.6 23.2%
EBITDA1 2,534.0 3,663.3 44.6%

1EBITDA is calculated as profit from operating activity adding back depreciation and amortization, impairment on tangible fixed assets and one-off expenses. 

Divisional Performance

Port Division

  • Container throughput in 1H2015 decreased by 28.0% YoY to 174,570 TEU in line with negative market trends.
  • General cargo volumes decreased by 17.2% YoY in 1H2015 to 1,055 thousand tons.
  • Division’s revenue decreased by 34.0% YoY in 1H2015 to $59,4m on the back of weakening volumes. EBITDA declined by 21.9% YoY to $31.7m. EBITDA margin improved by 8.3 pp up to 53.4% due to realization of cost-cutting initiatives.

Rail Division

  • Rail container transportation by Transgarant and Russkaya Troyka decreased by 2.3% YoY to 143.9 thousand TEU in 1H2015. Despite the decline in volumes, FESCO Rail Division continued to perform better than the market, which dropped by 9.0% YoY in 1H2015.
  • Transgarant rail cargo load increased by 1.0% YoY to 10.0 million tons outperforming the market, which continued to stay in the negative territory (1.5% YoY decline in 1H2015).
  • Rail Division’s revenue in 1H2015 amounted to $58.0m, a decrease of 31.8% YoY due to the effect of RUB devaluation.
  • Unfavourable market trends in combination with RUB devaluation resulted in EBITDA decreased by 53.9% YoY to $11.3m in 1H2015. EBITDA margin amounted to 19.5%, down by 9.3 pp.

Liner and Logistics Division

  • Drop of import to Russia resulted in the decrease of export-import sea container transportation volumes and intermodal volumes. In 1H2015, export-import sea container volumes decreased by 16.8% YoY to 168.4 thousand TEU, while intermodal container transportation decreased by 8.9% YoY to 107.0 thousand TEU.
  • Domestic sea container transportation decreased by 4.3% YoY in 1H2015 to 26.9 thousand TEU.
  • The decrease of volumes and negative dynamics of global freight rates resulted in the Division’s revenue and EBITDA decrease. In 1H2015, revenue decreased by 34.9% YoY to $198.4m, while EBITDA decreased by 13.8% YoY to $8.1m.

Shipping Division

  • In 1H2015, Shipping Division’s revenue was up by 44.7% YoY to $48,2m. It was driven by an increase of more profitable cargo transportation in Arctic basin and increase in international freight tariffs especially for container ships.
  • The Division’s EBITDA was up almost five times to $15.9m. EBITDA margin increased from 8.7% in 1H2014 to 33.0% in 1H2015 positively impacted by fleet renewal and cost-cutting program.

Bunkering

  • Bunkering revenue increased by 14.0% YoY in 1H2015 to $80.8m due to volumes growth, which was partially offset by the decrease in oil prices.
  • The Division’s EBITDA amounted to $4.6m in 1H2015. EBITDA margin was impacted by negative trend in oil prices and decreased by 3.0 pp to 5.7%.
$ millions 1H 2014 1H 2015 Dynamics
Port
   Revenue 90.0 59.4 -34.0%
   EBITDA2 40.6 31.7 -21.9%
   EBITDA margin 45.1% 53.4% +8.3 pp
Rail
   Revenue 85.0 58.0 -31.8%
   EBITDA2 24.5 11.3 -53.9%
   EBITDA margin 28.8% 19.5% -9.3 pp
Liner & Logistics
Revenue 304.8 198.4 -34.9%
   EBITDA2 9.4 8.1 -13.8%
   EBITDA margin 3.1% 4.1% +1.0 pp
Shipping
   Revenue 33.3 48.2 +44.7%
   EBITDA2 2.9 15.9 +448.3%
   EBITDA margin 8.7% 33.0% +24.3 pp
Bunkering
   Revenue 70.9 80.8 +14.0%
   EBITDA2 6.2 4.6 -25.8%
   EBITDA margin 8.7% 5.7% -3.0 pp

2EBITDA is calculated as Profit from operating activity adding back depreciation and amortization, Impairment on tangible fixed assets and one-off expenses.

FESCO Consolidated Group Financial Position

  • Pro-forma total debt3 amounted to $873m as of 30-Jun-2015.
  • Pro-forma net debt amounted to $832.7m as of 30-Jun-2015.
  • As of Jun 30, 2015, Pro-forma Net Debt / LTM adjusted EBITDA ratio was 4.97х.
3Total borrowings exclude the REPO loan secured by shares of TransContainer.

Liability management initiatives

  • On March 26, 2015, holders of FESCO 5 bln RUB bonds series BO-02 approved the maturity extension to November, 2017 with 40% issue par value redemption in 2016.
  • On March 31, 2015, FESCO commenced a cash tender offer targeting its 2018 Notes and 2020 Notes and a public purchase offer for up to RUB 4bln in Rouble bonds series BO-02 at fixed price of 80%.
  • The Company purchased $128.9m par value 2018 Notes and $91.1m par value 2020 Notes. The transaction was settled on May 14, 2015. In addition, FESCO repurchased 2.992 mln RUB par value bonds series BO-02.
  • The buyback transactions were financed by combination of own funds, bank loan, public debt and by the company’s ultimate controlling party. FESCO placed RUB 5.002 million RUB bonds series BO-01 due 2018. The Group has also signed a repurchase (REPO) agreement for USD 44m financing secured by its Senior Secured Notes with an international bank.

Reflection in IFRS Statements

  • As result of tender offer Eurobond buybacks FESCO decreased its debt by $220m for total consideration of $111m.
  • Under IFRSs requirements the resulting gain of $109m should have been recognised in the statement of profit and loss during the reporting period.
  • The buyback was partially financed by the loan received from the bank. In accordance with loan agreement the recognition of the above gain should be deferred until the loan repayment in 2018 when the bonds provided as collateral to the bank are returned to the Group.
  • The recognition of the financial result of buyback as a deferred gain within long-term liabilities rather than gain within profit and loss is not stipulated by IFRSs and has resulted in technical by nature qualified conclusion in the Auditor’s report.
all publications