DGAP-News: Far Eastern Shipping Company: Operational and

EquityStory.RS, LLC-News: Far Eastern Shipping Company / Key word(s): 9-month figures Far Eastern Shipping Company: Operational and Financial Results for the Nine-Month Period Ended September 30, 2015 (news with additional features) 25.11.2015 / 16:10 --------------------------------------------------------------------- November 25, 2015 Operational and Financial Results for the Nine-Month Period Ended September 30, 2015 FESCO Transportation Group (MOEX: FESH) announces its unaudited operational and consolidated IFRS results for the nine-month period ended September 30, 2015. Highlights - Transportation market rebound in 9M 2015 was weaker than expected, uncertain economic environment, FX rates fluctuations and slowdown in domestic consumption negatively impacted transportation volumes - Focus on strengthening relationship with direct accounts and extending presence in new business segments to generate incremental revenue and maintain profitability - In order to offset the negative influence of external factors, the Group continued to implement optimization programs aimed at cutting down costs by $40 million in 2015 - FESCO reduced CAPEX to the maintenance level, from $59.9 million for the nine-month period of 2014 to $14.7 million for the first 9 months of 2015 - Dmitry Shokhin joined the Management Board as Vice President for Corporate and Legal affairs Operational Overview - FESCO port and liner container volumes were down in line with negative market trend: - Container handling at VMTP was down by 32% YoY, to 259.2 thousand TEU - Export-import liner volumes were down by 25.5% YoY to 239.7 thousand TEU - Intermodal transportation was down by 23.1% YoY to 143.4 thousand TEU - General cargo volumes at the port decreased by 14% YoY to 1,536 thousand tons - Rail division results were slightly worse than the market which demonstrated c.10% decline in container transportation and 1.2% decline in overall rail cargo load in 9M2015: - Rail container transportation declined by 11.4% YoY to 209.6 thousand TEU - Rail cargo load declined by 2% YoY to 14.8 million tons Group Operational Results 9M 2014 9M 2015 YoY Dynamics Intermodal freight transportation (TEU) 186,434 143,418 -23.1% Export-import sea container trade (TEU) 321,541 239,651 -25.5% Domestic sea container trade (TEU) 46,511 43,295 -6.9% VMTP container throughput (TEU) 381,227 259,198 -32.0% VMTP general cargo throughput (excluding 1,786 1,536 -14.0% vehicles) (thousand tons) Rail container transportation 236.5 209.6 -11.4% («RusskayaTroyka» and «Transgarant») ('000 TEU) Rail cargo load (million tons) 15.1 14.8 -2.0% Rail cargo turnover (billion ton-kilometers) 23.3 27.1 +16.3% Financial Overview Group's financial results were affected by declining transportation volumes and RUB depreciation, but cost-control measures support the profitability - In 9M2015, Group's consolidated revenue decreased by 35.6% YoY to $543.5m. Consolidated EBITDA decreased by 32.7% to $88.5m - Group EBITDA margin increased by 0.7 pp YoY in 9M2015 - In RUB terms revenue in 9M2015 was up by 7.6% YoY to RUB 32,181m, while EBITDA was up by 14% YoY to RUB 5,308m - CAPEX was cut back close to maintenance level and amounted to $14.7m in 9M2015 (down by 75.5% YoY) - Cost cutting program is well on track with c. 65% or $26m out of $40m targeted savings achieved in 9M 2015 Group Financial Results $ million 9M 2014 9M 2015 YoY Dynamics Revenue 844.1 543.5 -36% EBITDA 131.5 88.5 -33% EBITDA margin 15.6% 16.3% +0.7 pp CAPEX 59.9 14.7 -75.5% Revenue 29,908 32,181 +7.6% EBITDA 4,673 5,308 +14% EBITDA 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 9M2015 decreased by 32% YoY to 259.2 thousand TEU in line with negative market trends - General cargo volumes decreased by 14% YoY to 1,536 thousand tons - Division's revenue decreased by 36.7% YoY to $89m on the back of weakening volumes. EBITDA declined by 28.8% YoY to $48.2m. EBITDA margin improved by 6.0 pp up to 54.2% due to realization of cost-cutting initiatives Rail Division - Rail container transportation by Transgarant and Russkaya Troyka decreased by 11.4% YoY to 209.6 thousand TEU in 9M2015 - Transgarant rail cargo load decreased by 2.0% YoY to 14.8 million tons - Rail Division's revenue in 9M2015 amounted to $81.8m, a decrease of 34.9% YoY due to the effect of RUB devaluation - Market trends in combination with RUB devaluation resulted in EBITDA decreased by 56.8% YoY to $15.8m in 9M2015. EBITDA margin amounted to 19.3%, down by 9.8 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 9M2015, export-import sea container volumes decreased by 25.5% YoY to 239.7 thousand TEU, while intermodal container transportation decreased by 23.1% YoY to 143.4 thousand TEU - Domestic sea container transportation decreased by 6.9% YoY in 9M2015 to 43.3 thousand TEU - The decrease of volumes and negative dynamics of global freight rates resulted in the Division's revenue and EBITDA decrease. In 9M2015, revenue decreased by 38.3% YoY to $294.4m, while EBITDA decreased by 48% YoY to $14m Shipping Division - In 9M2015, Shipping Division's revenue was up by 15.2% YoY to $66.6m, EBITDA was up 2.6 times to $21m. EBITDA margin increased from 13.8% in 9M2014 to 31.5% in 9M2015 Bunkering - Bunkering revenue decreased by 34.6% YoY in 9M2015 to $101.4m - The Division's EBITDA decreased by 66.3% YoY in 9M2015 to $3.2m. EBITDA margin decreased by 2.9 pp to 3.2% Divisional Financial Results $ million 9M 2014 9M 2015 YoY Dynamics Port Division Revenue 140.6 89.0 -36.7% EBITDA 67.7 48.2 -28.8% EBITDA margin 48.2% 54.2% +6.0 pp Rail Division Revenue 125.7 81.8 -34.9% EBITDA 36.6 15.8 -56.8% EBITDA margin 29.1% 19.3% -9.8 pp Liner and Logistics division Revenue 477.0 294.4 -38.3% EBITDA 26.9 14.0 -48.0% EBITDA margin 5.6% 4.8% -0.8 pp Shipping Division Revenue 57.8 66.6 +15.2% EBITDA 8.0 21.0 +162.5% EBITDA margin 13.8% 31.5% +17.7 pp Bunkering Revenue 155.1 101.4 -34.6% EBITDA 9.5 3.2 -66.3% EBITDA margin 6.1% 3.2% -2.9 pp EBITDA is calculated as Profit from operating activity adding back depreciation and amortization, Impairment on tangible fixed assets and one-off expenses FESCO Consolidated Financial Position - Pro-forma total debt* amounted to $851.9 million as of September 30, 2015 compared to $873 million as of June 30, 2015 - Pro-forma net debt amounted to $784.4 million as of September 30,2015 compared to $832.7 million as of June 30, 2015 *Total borrowings exclude the REPO loan in the amount of $69 million secured by shares of TransContainer PJSC. 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 2014, total container throughput at the Commercial Port of Vladivostok reached 513,481 TEU FESCO is one of the major 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 16.5 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. +++++ Additional features: Document: http://n.equitystory.com/c/fncls.ssp?u=BOTPXDGOYN Document title: Far Eastern Shipping Company Operational and Financial Results for the Nine-Month Period Ended September 30, 2015 --------------------------------------------------------------------- 25.11.2015 Dissemination of a Corporate News, transmitted by EquityStory.RS, LLC - a company of EQS Group AG. 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