DGAP-News: Far Eastern Shipping Company: Trading u
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EquityStory.RS, LLC-News: Far Eastern Shipping Company / Key word(s): Miscellaneous Far Eastern Shipping Company: Trading update for the three month and nine month periods ended September 30, 2014 28.11.2014 / 19:37 --------------------------------------------------------------------- November 28, 2014 Trading update for the three month and nine month periods ended September 30, 2014 FESCO Transportation Group (MOEX: FESH) provides a trading update with the operational and consolidated financial results as per IFRS for three months and nine months periods ended September 30, 2014. Highlights: - In 3Q 2014, FESCO continued to increase container transportation and handling volumes across all divisions strengthening its leading position in the Russian Far East - FESCO was #1 in the Far East by total container handling at sea port terminals with the market share of 31.9% and by import container handling with the market share of 40.5% - FESCO remained the leader by volume on all export-import sea container service lines where the Group operates with the market share of 41% - Container throughput at the Vladivostok port increased by 10.4% YoY in 3Q 2014 distinctly outperforming the Far East market, the fastest growing Russian sea basin - Container transportation by the Rail Division accelerated growth to 21.4% YoY in 3Q 2014 - In 3Q 2014, Rail division showed the first load volume growth and an improvement of the financial performance on QoQ basis compared to 2Q2014 after a long decline since the beginning of 2013 - In the environment of RUB depreciation, FESCO is leveraging a sustainable trend of growing bulk and containerized cargo export across all steps of the transportation value chain - Group results were positively impacted by growth of volumes across all division and negatively impacted by RUB devaluation, change of cargo mix in the port and continuous rail market weakness - In 3Q 2014, Group's consolidated revenue in USD increased by 13.3% YoY to $331m. In RUB, Group's consolidated revenue grew by 25.2% YoY to RUB 11,961m - In 3Q 2014, Group's EBITDA in USD increased by 4.0% YoY and reached $55.1m. On QoQ basis Group's EBITDA increased by 55.7% driven by significant performance improvement across divisions. In RUB, Group's EBITDA was up by 15.1%YoY and reached RUB 1,994m. - EBITDA margin declined on YoY basis due to increasing share of less marginal export cargo and increased from 13.1% in 2Q 2014 to 16.6% in 3Q 2014. Group Financial Results <pre> $ million 2Q 3Q 3Q YoY 9M 9M YoY 2014 2014 2013 Dynamics 2014 2013 Dynamics Revenue 270.7 331.0 292.0 +13.3% 844.1 849.6 -0.6% EBITDA 35.4 55.1 53.0 +4.0% 123.3 152.4 -19.1% EBITDA margin 13.1% 16.6% 18.2% -1.6 pt 14.6% 17.8% -3.2 pt Capital 17.9 23.6 14.9 +58.2% 59.9 40.1 +49.4% Expenditures </pre> <pre> RUB million 2Q 3Q 3Q YoY 9M 9M YoY 2014 2014 2013 Dynamics 2014 2013 Dynamics Revenue 9 462 11 961 9 557 +25.2% 29 908 26 861 +11.3% EBITDA 1 238 1 994 1 732 +15.1% 4 387 4 818 -8.9% EBITDA margin 13.1% 16.7% 18.1% -1.4 pt 14.7% 17.8% -3.1 pt </pre> Divisional Performance Highlights Port Division - Container throughput in 3Q 2014 was up by 10.4% YoY driven mostly by import-export volumes as a result of continued growth of international trade between Russia and Asian countries and increasing containerization level in Russia - Growth of general cargo volumes by 10.6% YoY driven primarily by an increase in throughput of ferrous metals and chemicals - As a result of positive operational performance, revenue in RUB increased by 5.2% YoY in 3Q 2014. Revenue in USD decreased by 6.2% YoY due to RUB devaluation - In 3Q 2014, EBITDA decreased by 4.5% YoY in RUB and by 14.4% YoY in USD due to RUB devaluation, certain one-offs and increase in operational expenses. EBITDA in RUB adjusted for one-offs increased by 4.8% YoY from RUB 905.6m in 3Q 2013 to RUB 949.3m in 3Q2014. EBITDA in USD adjusted for one-offs decreased by 5.9% YoY from $27.9m to $26.2m - EBITDA margin decreased by 5.1pt from 58.6% in 3Q 2013 to 53.5% in 3Q 2014. EBITDA margin decreased due to one-offs and growing share of less marginal export of both bulk cargo and containers Rail Division - Rail container transportation was up by 21.4% YoY in 3Q 2014 due to increased demand for FESCO block train services and fitting platforms fleet size - Rail cargo load was up by 2.0% YoY in 3Q 2014 outperforming the Russian rail market - In Q3 2014, revenue grew by 4% QoQ in RUB and by 1% QoQ in USD driven by volume growth in rail container transportation. Revenue in USD decreased by 29.1% YoY to $40.7m over the same period due to continued decrease in gondola rates and ruble devaluation. - In Q3 2014, EBITDA in RUB increased by 11% QoQ and EBITDA in USD increased by 8% QoQ to $12.1m. In 3Q 2014, EBITDA in USD decreased by 40.7% YoY (35.6% YoY decrease in RUB) due to declined gondola rates Liner and Logistics Division - Strong growth of export-import sea lines and intermodal transportation volumes driven mainly by the increase in export-import flows on the back of growing trade with Asia, and specifically with China - In 3Q 2014, revenue in RUB was up by 12.9% YoY. Revenue in USD was up by 1.3% YoY due to negative effect of RUB devaluation on cabotage rates (denominated in RUB) and RUB-denominated component of intermodal rate. - Division's EBITDA for 3Q 2014 increased two folds in USD from $8.8m in 3Q 2013 to $17.5m in 3Q 2014. EBITDA in RUB increased by 121% and EBITDA margin was up by 5.0pt. Shipping Division - Shipping Division demonstrated strong results due to replacement of old vessels with new more efficient ones, as well as positive results of icebreakers operations, profitable contracts with third parties and decreased administrative costs - In 3Q 2014, revenue in USD increased by 68.6% YoY to $24.6m - EBITDA turned from loss of $1.5m to profit of $5.1m and EBITDA margin reached 20.8% Bunkering - Bunkering business contributed $84.1m to the Group's revenue and $3.3m to the Group's EBITDA in 3Q 2014 <pre> $ millions 2Q 2014 3Q 2014 3Q 2013 Dynamics 9M 2014 9M 2013 Dynamics Port Revenue 45.5 50.6 54.0 -6.2% 141.0 152.0 -7.2% EBITDA(1) 20.6 27.1 31.6 -14.4% 67.7 75.6 -10.4% EBITDA margin 45.2% 53.5% 58.6% -5.1 pt 48.0% 49.7% -1.7 pt Rail Revenue 40.4 40.7 57.4 -29.1% 125.7 198.4 -36.6% EBITDA 11.2 12.1 20.4 -40.7% 36.6 73.5 -50.2% EBITDA margin 27.7% 29.7% 35.5% -5.8 pt 29.1% 37.0% -7.9 pt Liner & Logistics Revenue 167.5 172.2 170. +1.3% 477.0 497. -4.0% EBITDA 9.4 17.5 8.8 +100.1% 26.9 26.3 +2.5% EBITDA margin 5.6% 10.2% 5.2% +5.0 pt 5.6% 5.3% +0.3 pt Shipping Revenue 13.5 24.6 14.6 +68.6% 57.8 43.3 +33.6% EBITDA -1.5 5.1 -1.5 - 8.0 -5.3 - EBITDA margin - 20.8% - - 13.9% - - Bunkering Revenue 41.5 84.1 34.5 +143.6% 155.1 46.6 +233% EBITDA 2.4 3.3 1.6 +101.4% 9.5 2.5 +280% EBITDA margin 5.8% 3.9% 4.8% -0.8 pt 6.1% 5.3% +0.8 pt </pre> (1) EBITDA of Port division was retrospectively adjusted for reclassification of non-operating marketing expenses from Port division to Corporate division starting from 30 September 2014 for $2.0m in Q3 and 9M 2013 and $1.3m in Q2 2014 FESCO Consolidated Group Financial Position Pro-forma net debt decreased from $1,016m as of 30-Jun-2014 to $955.6m as of 30-Sep-2014: - Consolidated debt includes $550m of 8.00% Senior Secured Notes due 2018 and $325m of 8.75% Senior Secured Notes due 2020, as well as RUB 5bn of bonds, the proceeds from which were used to refinance the Group's acquisition-related and pre-existing debt - As of September 30, 2014, Pro-forma Net Debt / LTM adjusted EBITDA ratio was 5.8x <pre> $ millions At 30 September, 2014 Pro-forma total Debt(2) 1,115.6 Cash 160.0 Pro-forma net Debt 955.6 Pro-forma net Debt/ LTM Adj. EBITDA 5.8x </pre> (2)Total borrowings include USD 550m 8.00% Senior Secured Notes due 2018 and USD 325m 8.75% Senior Secured Notes due 2020; RUB 5bn ruble bonds and exclude the $150m REPO loan secured by shares of TransContainer FESCO operational results for 3Q and 9M 2014 <pre> 2Q2- 3Q2- 3Q2- Dyn- 9M2- 9M2- Dyn- 014 014 013 amics 014 013 amics Intermodal freight transportation* 61,4 70,2 62,3 +12. 187, 179, +4.5% (TEU) 79 42 99 6% 716 586 Export-import sea container trade 108, 118, 93,3 +27. 321, 274, +17. (TEU) 067 999 27 5% 541 530 1% Domestic sea container trade (TEU) 15,3 18,3 17,3 +5.5% 46,5 46,2 +0.5% 26 57 93 11 64 VMTP container throughput(TEU) 132, 138, 125, +10. 381, 349, +9.1% 784 615 507 4% 227 309 Import +11. Export 58,9 60,9 54,9 +10. 169, 152, 1% Cabotage 24 57 95 8% 446 558 +12. 47,4 48,1 39,9 +20. 133, 118, 8% 37 33 85 4% 601 483 -0.1% 26,4 29,5 30,5 -3.3% 78,1 78,2 43 25 27 80 68 VMTP non-container cargo 448 511 462 +10. 1,786 1,523 +17. throughput (excluding vehicles) 6% 3% (thousand tons) VMTP automobiles and 21,4 18,4 22,3 - 55,2 70,2 - transportation vehicles throughput 87 62 47 17.4% 78 69 21.3% (units) Rail container transportation 77.1 89.2 73.4 +21. 236.5 209.8 +12. («RusskayaTroyka» and 4% 7% «Transgarant») ('000 TEU) Rail cargo load (million tons) 5.0 5.2 5.1 +2.0% 15.1 15.3 -1.3% Rail cargo turnover (billion ton- 7.8 7.9 8.4 -6.0% 23.3 24.5 -4.9% kilometers) </pre> * - excluding transportation of empty carrier owned containers (COC) About FESCO FESCO is one of the leading privately-owned transportation and logistics companies in Russia with operations in ports, rail, integrated logistics and shipping business. Diversified but integrated asset portfolio enables FESCO to provide door-to-door logistics solutions and control almost all steps of the intermodal transportation value chain. The majority of FESCO's operations are located in the Russian Far East and the Group benefits from growing trade volumes between Russia and Asian countries. FESCO is the leader of container transportation through the Russian Far East via international sea container lines to/from Asian countries, domestic sea container lines and by rail. FESCO is the leading port container operator in the Far East region. FESCO controls the Commercial Port of Vladivostok which has throughput capacity of 3.9 million tons of general cargo and oil products, 150,000 vehicles and over 600,000 TEU of containers. In 2013, total container throughput at the Commercial Port of Vladivostok reached 477,000 TEU, including 204,000 TEU of imported cargo. FESCO is among the 10 largest Russian private rail operators, providing services under "Transgarant" (100% subsidiary of FESCO) and "Russian Troika" (50% joint venture with JSC Russian Railways) brands. "Transgarant" operates a fleet of 16.6 thousand units of rolling stock, while "Russian Troika" operates a fleet of 1.7 thousand container platforms. FESCO has a fleet of 22 vessels, mostly deployed through own sea service lines, and 4 icebreakers leased under long-term contracts. IR contacts: Galina Shilina IR Director +7 (495) 926 80 00 ext.11007 [email protected] Ekaterina Semenova IR manager +7 (495) 926 80 00 ext.11058 [email protected] --------------------------------------------------------------------- 28.11.2014 Dissemination of a Corporate News, transmitted by EquityStory.RS, LLC - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. 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