EquityStory.RS, LLC-News: Far Eastern Shipping Company / Key word(s):
Miscellaneous
Far Eastern Shipping Company: Results for the three-month period ended
March 31, 2015
29.05.2015 / 14:42
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May 29, 2015
Results for the three-month period ended March 31, 2015
FESCO Transportation Group (MOEX: FESH) today announces its operational and
consolidated financial results as per IFRS for three-month period ended
March 31, 2015.
1Q 2015 Highlights:
- FESCO increased its market share on the export-import sea container
service lines through Russian Far East up to 45.2%.
- FESCO remains the largest port operator in the Far East basin by import
container handling with market share amounted to 37.8%
- The macroeconomic challenges put pressure on FESCO port container
handling and export-import sea container transportation, however the
intermodal and rail container transportation continued to grow
- Group EBITDA increased by 5.4% YoY as cost reductions mitigated the
impact of the 15.8% YoY decline in revenue.
- Cost control measures led to significant reduction in operating and
administrative costs
- Group EBITDA margin was up by 4pp to 18%. Port EBITDA margin up 13pp to
record 58%
- FX initiatives were completed at Port with 81% of Port revenue
denominated in USD to improve the FX revenue and cost structure
- CAPEX was down from $19.2m in 1Q2014 to $3.8m in 1Q2015
- Subsequent to quarter-end the group successfully completed the
transaction for partial buy back of outstanding USD bonds and RUB
bonds.
Operational overview
- In 1Q2015, import container cargo volumes turned into negative
territory becoming the largest contributor to container volumes drop in
the Far East market. In line with the market, the container handling at
VMTP was 18% YoY down to 90.1 thousand TEU. Export-import sea container
transportation was also down by 10% YoY to 84.8 thousand TEU
- The intermodal transportation and rail container transportation
services continued to be in demand from our customers and increased by
2.7% to 57.5 thousand TEU and by 8.5% YoY to 76.2 thousand TEU
respectively
- Non-container volumes in port were negatively influenced by drop in
ferrous metals and declined by 32.5% YoY to 557.7 thousand tons. Rail
cargo load declined by 4.1% YoY to 4.7 million tons
Financial overview
Group's financial results were affected by declining volumes and RUB
depreciation, but cost-control measures and conversion of export-import
tariffs in port from RUB to USD boosted the profitability.
- Group's consolidated revenue decreased by 15.8% YoY to $204.2m.
Consolidated EBITDA increased by 5.4% to $36.9m
- In RUB terms revenue was up by 49,5% YoY to RUB 12,683m, while EBITDA
was up by 87.5% YoY to RUB 2,301m
- CAPEX was cut back close to maintenance level and amounted to $3.8m
(down 80.2% YoY)
Group Financial Results
<pre>
$ million 1Q 2014 1Q 2015 YoY Dynamics
Revenue 242.5 204.2 -15.8%
EBITDA* 35.0 36.9 +5.4%
EBITDA margin 14.4% 18.1% +3.7 pp
CAPEX 19.2 3.8 -80.2%
</pre>
<pre>
RUB million 1Q 2014 1Q 2015 YoY Dynamics
Revenue 8 484.9 12 682.5 +49.5%
EBITDA* 1 226.8 2 300.7 +87.5%
EBITDA margin 14.5% 18.1% 3.6 pp
</pre>
*) 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 1Q2015 decreased by 17.9% YoY to 90,117 TEU in
line with negative market trends
- General cargo volumes decreased by 32.5% YoY to 557.7 thousand tons
mainly due to decline in ferrous metals and chemicals
- Division's revenue decreased by 28.2% YoY to $31.9m on the back of
weakening volumes. EBITDA declined by 7.0% YoY to $18.6m. The
operational costs at port were reduced by 51%YoY impacted by RUB
devaluation and cost reduction. EBITDA margin improved by 13.3 pp up to
record 58.3%.
Rail Division
- Rail container transportation by Transgarant and Russkaya Troyka was up
by 8.5% YoY to 76.2 thousand TEU significantly outperforming the rail
container market which decreased by 7.7% in 1Q2015. Volumes growth was
driven by stable demand for rail container transportation and the
extension of Transgarant fleet of fitting platforms
- Transgarant rail cargo load declined by 4.1% YoY to 4.7 million tons
due to drop in iron ore and construction materials transportation
- Rail Division's revenue in 1Q2015 amounted to $26.7m, a decrease of
40.1% YoY due to the effect of RUB devaluation and lower gondola rates
- Unfavourable market trends in combination with RUB devaluation resulted
in EBITDA decreased by 63.2% YoY to $4.9m. EBITDA margin amounted to
18.4%, down by 11.4 pp
Liner and Logistics Division
- Intermodal freight transportation was up by 2.7% YoY to 57.5 thousand
TEU
- Drop of import to Russia resulted in 10.2% YoY decrease of
export-import sea container transportation volumes, which amounted to
84.8 thousand TEU in 1Q2015
- Domestic sea container transportation was up by 2.1% YoY to 13.1
thousand TEU
- The decrease of export-import volumes and negative dynamics of global
freight rates resulted in the Division's revenue decrease of 29.1% YoY
to $97.3m EBITDA amounted to $1m
Shipping Division
- Shipping Division's revenue was up by 41.9% YoY to $28.1m driven by
positive result from icebreaking fleet and the new revenue stream from
tanker operations for bunkering business. The Division's EBITDA was up
almost three times to $12.5m due renewal of fleet and an effect of RUB
devaluation on costs. EBITDA margin reached 44.5% in 1Q2015, up by 22.3
pp
Bunkering
- Bunkering revenue increased by 76.5% YoY to $51.9m due to volumes
growth
- The Division's EBITDA amounted to $4.6m in 1Q2015. EBITDA margin was
impacted by negative trend in oil prices and decreased by 4.0 pp to
8.9%
<pre>
$ millions 1Q 2014 1Q 2015 Dynamics
Port
Revenue 44.4 31.9 -28.2%
EBITDA 20.0 18.6 -7.0%
EBITDA margin 45.0% 58.3% +13.3 pp
Rail
Revenue 44.6 26.7 -40.1%
EBITDA 13.3 4.9 -63.2%
EBITDA margin 29.8% 18.4% -11.4 pp
Liner & Logistics
Revenue 137.3 97.3 -29.1%
EBITDA 0 1.0 -
EBITDA margin 0.0% 1.0% +1.0 pp
Shipping
Revenue 19.8 28.1 +41.9%
EBITDA 4.4 12.5 +184.1%
EBITDA margin 22.2% 44.5% +22.3 pp
Bunkering
Revenue 29.4 51.9 +76.5%
EBITDA 3.8 4.6 +21.1%
EBITDA margin 12.9% 8.9% -4.0 pp
</pre>
EBITDA 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 net debt amounted to $897m as of 31-Mar-2015 (a decrease from
$961m as of 31-Dec-2014).
Pro-forma total debt amounted to $1,122m as of 31-Mar-2015.
- As of March 31, 2015, 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 March 31, 2015, Pro-forma Net Debt / LTM adjusted EBITDA ratio
was 5.0Ñ
<pre>
$ millions At 31 March, 2015
Pro-forma total Debt(2) 1,122
Cash 225
Pro-forma net Debt 897
Pro-forma net Debt/ LTM Adj. EBITDA 5.0x
</pre>
(2)Total 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 agreement for USD 44m financing
secured by its Senior Secured Notes with an international bank
FESCO operational results for 1Q 2015
<pre>
1Q 2014 1Q 2015 Dynamics
Intermodal freight transportation (TEU) 55,995 57,525 +2.7%
Export-import sea container trade (TEU) 94,475 84,797 -10.2%
Domestic sea container trade (TEU) 12,828 13,092 +2.1%
VMTP container throughput(TEU) 109,828 90,117 -17.9%
VMTP non-container cargo throughput (excluding 826.7 557.7 -32.5%
vehicles) (thousand tons)
Rail container transportation 70.2 76.2 +8.5%
(«RusskayaTroyka» and «Transgarant») ('000
TEU)
Rail cargo load (million tons) 4.9 4.7 -4.1%
Rail cargo turnover (billion ton-kilometers) 7.6 9.6 +26.3%
</pre>
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 17.8 thousand units of rolling stock, while "Russian Troika"
operates a fleet of 1.6 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
gshilina@fesco.com
Ekaterina Semenova
IR manager
+7 (495) 926 80 00 ext.11058
esemenova@fesco.com
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363345 29.05.2015
DGAP-News: Far Eastern Shipping Company: Results for the three-month period ended March 31, 2015
| Source: EQS Group AG