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!!!Финансовые результаты по МСФО за третий квартал и 9 месяцев 2014 г.

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angle-left null !!!Финансовые результаты по МСФО за третий квартал и 9 месяцев 2014 г.

RNS Number : 2342Y

28 November 2014

PJSC TransContainer

Results for the third quarter and first nine months of 2014

PJSC «TransContainer» («TransContainer» or the «Company» together with its consolidated subsidiaries) today publishes its management report together with the interim condensed financial statements for the third quarter and first nine months ended 30 September 2014. The financial statements presented in this announcement have been prepared in accordance with the International Financial Reporting Standards (IFRS).

Operating and financial review

Summary

TransContainer is the leading intermodal container transportation company in Russia. As of 30 September 2014, the Company accounted for approximately 45.5% of Russia's rail container transportation market. It owns and operates 26,918 flatcars and 63,918 ISO containers. TransContainer also owns a network of rail-side container terminals located at 46 railway stations across Russia and operates one terminal in Slovakia under a long-term lease agreement. The Company's joint venture JSC KedenTransService («KedenTransService», or «KDTS») also operates 19 inland rail-side terminals in Kazakhstan. The Company's sales network comprises more than 130 sales outlets in Russia, along with additional outlets across the CIS, Europe and Asia.

During the first nine months of 2014, Russia's rail container transportation market proved to be relatively resilient to the current macroeconomic and political challenges, expanding 6.0% year on year. The main growth driver was domestic rail container transportation, which increased by 10.3% year on year; international transportation was up by just 2.6% driven by higher levels of export and transit transportation.

The Company's rail container transportation volumes in Russia increased by 1.8% year on year to 1,093 thousand twenty-foot equivalent units («TEU») for the nine months ended 30 September 2014, compared to 1,074 thousand TEU in the corresponding period of 2013. Revenue-generating transportation[1] volumes grew by 3.4% year on year to 849 thousand TEU. Terminal handling volumes in Russia increased by 1.6% year on year to 994 thousand TEU in the reporting period.

For the three months ended 30 September 2014, the Company's rail container transportation volumes, revenue-generating volumes and terminal handling in Russia grew by 1.0% year on year, 1.3% year on year and 0.1% year on year respectively.

The pricing environment continued to be challenging amid increased market competition and uncertainty around the economy, resulting in a decrease in average transportation tariffs during the reporting period.

The Company's results in 2014 were also impacted by the deconsolidation of KedenTransService in December 2013 after disposing of a 17% stake in the entity. Following this transaction, KedenTransService's assets, liabilities, operating results and cash flow statements are excluded from TransContainer's consolidated results for the reporting period, while they were consolidated for the nine months ended 30 September 2013.

During the nine months ended 30 September 2014, the Company's total revenue was down 6.3% year on year to RUB 26,984 million and adjusted revenue decreased by 18.1% year on year to RUB 15,412 million. EBITDA fell by 18.2% year on year to RUB 6,409 million from RUB 7,837 million in the corresponding period of 2013. Profit for the period was down 29.3% year on year to RUB 3,301 million from RUB 4,666 million in the corresponding period last year.

In the third quarter of 2014, the Company's total revenue decreased by 11.1% year on year to RUB 9,450 million, while adjusted revenue fell by 21.2% year on year to RUB 5,343 million. As a result, EBITDA dropped by 21.2% year on year to RUB 2,301 million and the profit for the period decreased by 35.3% year on year to RUB 1,222 million.

In terms of profitability, the adjusted EBITDA margin in the first nine months of 2014 remained flat at 41.6%, compared to 41.7% for the first nine months of 2013, while the net income margin decreased frоm 24.8% to 21.4%. On a quarterly basis, the adjusted EBITDA margin remained unchanged at 43.1%, while the net income margin decreased from 27.9% to 22.9%.

As of 30 September 2014, the Company's total debt was RUB 7,579 million with net debt of only RUB 5,120 million. As a result, the Net Debt/ LTM EBITDA ratio remained at a comfortable level of 59%.

Capital expenditure for nine months ended 30 September 2014 increased by 39.8% year on year to RUB 3,238 million. In accordance with the Company's policy, all capital expenditure during the reporting period was financed by the Company's own cash flow.

Recent developments and outlook

In the fourth quarter of 2014 the rail container transportation market demonstrated signs of weakness amid increasing macroeconomic uncertainty. Against this backdrop, management expects the market growth rate for the full year to shift towards the lower end of the single-digit range. Despite the market challenges, we see continuing improvements in the rail containerisation level, growth in industrial production and resilient consumer consumption in Russia. All these factors are expected to support market growth in the near future.

Along with the weakening economic environment, increasing competition in the container segment continues to weigh on operator tariffs. Given the current market environment, the Company's management will focus on business optimisation, as well as improving management efficiency and the quality of service.

On 24 November 2014, Russian Railways, the majority shareholder of the Company, transferred its full shareholding of 50%+2 shares in TransContainer to the share capital of the newly established United Transportation and Logistics Company («UTLC»). Upon establishment, the share capital of UTLC amounted to RUB 39.7 billion with Russian Railways holding no less than 99.84% of the share capital of UTLC, and Belorussian Railway and JSC Kazakhstan Temir Zholy each has a shareholding of up to 0.08%. Russian Railways may decrease its stake in the share capital of UTLC in the future to up to 70% as a result of new share issues in favour of JSC Kazakhstan Temir Zholy and Belarusian Railway, provided that the issue price is no less than the market price as determined by an independent appraisal.

TransContainer believes that the establishment of UTLC will help to unlock the three countries' land transit potential and may have a positive impact on rail container transportation volumes and asset utilisation of all the local operators involved.

The Company's management will continue to invest in rolling stock and terminal modernisation, and will pursue suitable M&A opportunities in line with its strategy, subject to changes in the economic environment and container market trends. Despite current challenges, the Company believes that the Russian container transportation market is fundamentally attractive with long-term growth potential, driven by industrial production, resilient consumer confidence and scope for further improving containerisation.

Key operating results

Rail container transportation volumes in Russia

The Company's rail container transportation volumes in Russia for the third quarter of 2014 increased by 1.0% to 376 thousand twenty-foot equivalent units («TEU»), compared to 373 thousand TEU in the same period of 2013. This was mainly due to a 7.0% increase in domestic transportation volumes. This partly offset a 16.0% year-on-year decrease in imports. The fall in the Company's import transportation was primarily driven by a slump in Russia's total rail container imports. The Company's rail container transportation volumes in Russia increased by 2.3% quarter-on-quarter in the third quarter of 2014.

Transportation of containers by TransContainer's fleet in 3Q 2014 (ISO Loaded + Empty), 000' TEU

 

3Q 2014

3Q 2013

Change

     

000' TEU

Percent

Domestic Routes

205.0

191.7

+13.3

+7.0%

Export

87.8

86.9

+1.0

+1.1%

Import

56.8

67.7

-10.8

-16.0%

Transit

26.6

26.5

+0.1

+0.3%

All Routes

376.2

372.7

+3.5

+1.0%

The Company's rail container transportation volumes for the first nine months of 2014 grew by 1.8% year-on-year to 1,093 thousand TEU, compared to 1,074 thousand TEU for the first nine months of 2013. This increase was mainly driven by an improvement in domestic, export and transit transportation volumes, and helped to partly offset an 18.9% year on year decline in imports.

Transportation of containers by TransContainer's fleet in 9M 2014 (ISO Loaded + Empty), 000' TEU

 

9M 2014

9M 2013

Change

     

000' TEU

Percent

Domestic Routes

561.9

534.7

+27.2

+5.1%

Export

281.0

267.1

+13.9

+5.2%

Import

162.2

199.9

-37.7

-18.9%

Transit

88.0

72.3

+15.7

+21.8%

All Routes

1,093.1

1,074.0

+19.1

+1.8%

The drop in container import volumes was largely caused by the devaluation of the rouble against the US dollar and Euro, as well as the slump in consumption on the back of economic uncertainty.

The Company's revenue-generating container transportation[2] volumes in Russia amounted to 292 thousand TEU in the third quarter of 2014, up 1.3% compared to the third quarter of 2013. For the first nine months of 2014, revenue-generating container transportation volumes grew by 3.4% year on year to 849 thousand TEU.

TransContainer's estimated share of Russia's rail container transportation market in the first nine months of 2014 decreased to 45.5% from 47.4% in the corresponding period of 2013. In the third quarter of 2014, the Company's market share remained broadly flat at 45.4% compared to 45.9% in the second quarter of 2014.

Rail container transportation volumes in Kazakhstan

Rail container transportation volumes carried out by KedenTransService («KDTS»), the joint venture between the Company and Kazakhstan Temir Zholy in Kazakhstan, fell by 7.1% year on year to 65.6 thousand TEU in the third quarter of 2014. In the first nine months of 2014, rail container transportation volumes increased by 9.3% year on year to 183.0 thousand TEU. This was a result of the average flatcar fleet under operation being expanded and an increase in transit transportation through Kazakhstan by the company's fleet.

Terminal handling in Russia

In the third quarter of 2014, throughput of the Company's rail container terminal network in Russia remained flat year on year at about 359 thousand TEU. The terminal throughput was affected by an 86.8% year on year drop in handling medium-duty containers (MDC), which was fully offset by a 1.4% year on year increase in ISO container handling. MDC handling volumes in the third quarter of 2014 amounted to 0.7 thousand TEU, compared to 5.1 thousand TEU in the corresponding period of 2013.

For the first nine months of 2014, throughput of the Company's rail container terminal network in Russia amounted to 994 thousand TEU, representing a year on year increase of 1.6%. MDC handling volumes dropped 83.4% year on year for the same period.

Terminal handling in Kazakhstan

Container handling by KDTS at the cross-border rail side terminals Dostyk and Altynkol amounted to 54.2 thousand TEU in the third quarter of 2014, an 87.8% year on year increase. For the first nine months of 2014, terminal handling volumes at these cross-border terminals amounted to 148.6 thousand TEU, which represents a 62.9% year on year increase. This was a result of a rise in cross-border handling volumes by the Company and getting new container handling yards at the Altynkol rail station under operation.

In the third quarter of 2014, non-container throughput at KDTS' terminals increased by 21.8% year on year to 1.1 million tonnes. For the first nine months of 2014, non-container throughput at KDTS' terminals was down 2.6% year on year to 2.5 million tonnes.

Asset utilisation

In the third quarter of 2014, both flatcar and container empty runs in Russia improved moderately as a result of the Company's efforts to optimise its fleet utilisation.

Growth in flatcar and container turnover primarily reflects weaker customer demand and greater average distances travelled by the Company's containers.

 

3Q 2014

3Q 2013

9M 2014

9M 2013

Turnover of containers, days

32.8

26.7

31.6

25.9

Turnover of flatcars, days

14.2

13.7

14.2

13.7

         

Empty run[3] for containers, %

29.2%

30.8%

29.1%

30.3%

Empty run for flatcars, %

7.4%

7.7%

6.8%

6.8%

Description of Key Consolidated Statement of Comprehensive Income Items

The following table sets out the Company's results for the three months and nine months ended 30 September 2014 and 2013.

RUB million

9m 2014

9m 2013

Year on year change

RUB mln %

3Q 2014

3Q 2013

Year on year change

RUB mln %

Revenue

26,984

28,793

-1,809

-6.3%

 

9,450

10,631

-1,181

-11.1%

Other operating income

518

499

+19

+3.8%

 

195

152

+43

+28.3%

Operating expenses

-23,445

-23,178

-267

+1.2%

 

-8,269

-8,395

+126

-1.5%

Operating profit

4,057

6,114

-2,057

-33.6%

 

1,376

2,388

-1,012

-42.4%

Interest expense

-495

-569

+74

-13.0%

 

-156

-184

+28

-15.2%

Interest income

118

182

-64

-35.2%

 

23

41

-18

-43.9%

Foreign exchange gain, net

239

62

+177

+285.5%

 

206

-10

+216

-2160.0%

Share of result of associates and JVs

148

5

+143

+2860.0%

 

58

0

+58

 

Other financial results, net

18

32

-14

-43.8%

 

0

0

+0

 
                   

Profit before income tax

4,085

5,826

-1,741

-29.9%

 

1,507

2,235

-728

-32.6%

Income tax expense

-784

-1,160

+376

-32.4%

 

-285

-346

+61

-17.6%

Profit for the period

3,301

4,666

-1,365

-29.3%

 

1,222

1,889

-667

-35.3%

Attributable to:

                 

Equity holders of the parent

3,301

4,606

-1,305

-28.3%

 

1,222

1,820

-598

-32.9%

Non-controlling interest

0

60

-60

-100.0%

 

0

69

-69

-100.0%

Other comprehensive income

105

154

-49

-31.8%

 

388

-46

+434

-943.5%

Remeasurements and other reserves for post-employment benefit plans

30

19

+11

+57.9%

 

3

27

-24

-88.9%

Exchange differences on translating foreign operations

67

135

-68

-50.4%

 

385

-73

+458

-627.4%

Other effects

8

0

+8

   

0

0

+0

 

Total comprehensive income for the period

3,406

4,820

-1,414

-29.3%

 

1,610

1,843

-233

-12.6%

Attributable to:

                 

Equity holders of the parent

3,406

4,724

-1,318

-27.9%

 

1,610

1,797

-187

-10.4%

Non-controlling interest

0

96

-96

-100.0%

 

0

46

-46

-100.0%

                     

The Company's financial results for the three months and nine months ended 30 September 2014 reflect the challenging pricing environment in the Russian rail container market amid the deteriorating economic conditions and toughening competition, as well as the deconsolidation of KDTS.

In the first nine months of 2014, the Company's total revenue was down 6.3% year on year to RUB 26,984 million and adjusted revenue fell by 18.1% year on year to RUB 15,412 million. This decrease led EBITDA declining by 18.2% year on year to RUB 6,409 million, from RUB 7,837 million in the corresponding period of 2013. Profit for the period fell by 29.3% year on year to RUB 3,301 million in the first nine months of 2014, from RUB 4,666 million in the corresponding period last year.

In the third quarter of 2014, the Company's total revenue decreased by 11.1% year on year to RUB 9,450 million, while adjusted revenue fell by 21.2% year on year to RUB 5,343 million. As a result, EBITDA dropped by 21.2% year on year to RUB 2,301 million and the profit for the period decreased by 35.3% to RUB 1,222 million.

Additional financial information

Adjusted Revenue, Adjusted Operating Expenses, EBITDA, Adjusted EBITDA Margin and Adjusted Operating Margin are not recognised under IFRS as measures of financial performance, but are calculated on the basis of IFRS figures and are presented as supplemental indicators of the Company's operating performance. These supplemental measures have limitations as analytical tools, and investors should not consider any of them in isolation, or any combination of them, as a substitute for analysis of our results as reported under IFRS.

RUB million

9M 2014

9M 2013

Year on year change

RUB mln %

 

3Q 2014

3Q 2013

Year on year change

RUB mln %

Adjusted Revenue1

15,412

18,816

-3,404

-18.1%

 

5,343

6,782

-1,439

-21.2%

Adjusted operating expenses2

11,873

13,201

-1,328

-10.1%

 

4,162

4,546

-384

-8.4%

EBITDA3

6,409

7,837

-1,428

-18.2%

 

2,301

2,921

-620

-21.2%

Adjusted EBITDA margin4

41.6%

41.7%

     

43.1%

43.1%

   

Total debt

7,579

9,178

-1,599

-17.4%

 

7,579

9,178

-1,599

-17.4%

Net debt5

5,120

3,845

+1,275

+33.2%

 

5,120

3,845

+1,275

+33.2%

1 Adjusted Revenue is calculated as total revenue less cost of integrated freight forwarding and logistics services.

2 Adjusted Operating Expenses are calculated as operating expenses less cost of integrated freight forwarding and logistics services.

3 EBITDA is defined as profit for the period before income tax, interest expense and depreciation and amortisation.

4 Adjusted EBITDA Margin is defined as EBITDA divided by Adjusted Revenue.

5 Net Debt is calculated as long-term debt, finance lease obligations, short-term debt and current portion of long-term debt less cash and cash equivalents and short-term investments.

Revenue

The following table sets out the breakdown of total revenue for the nine months and the three months ended 30 September 2014 and 2013 respectively.

RUB million

9M 2014

9M 2013

Year on year change

RUB mln %

3Q 2014

3Q 2013

Year on year change

RUB mln %

Integrated freight forwarding and logistics services

20,106

17,429

+2,677

+15.4%

 

6,965

6,663

+302

+4.5%

Rail-based container shipping services

4,082

6,270

-2,188

-34.9%

 

1,474

2,140

-666

-31.1%

Terminal services and agency fees

1,584

3,051

-1,467

-48.1%

 

590

1,087

-497

-45.7%

Truck deliveries

734

1,055

-321

-30.4%

 

257

379

-122

-32.2%

Other freight forwarding services

210

446

-236

-52.9%

 

69

161

-92

-57.1%

Bonded warehousing services

179

301

-122

-40.5%

 

61

110

-49

-44.5%

Other

89

241

-152

-63.1%

 

34

91

-57

-62.6%

Total revenue

26,984

28,793

-1,809

-6.3%

 

9,450

10,631

-1,181

-11.1%

Total revenue decreased by RUB 1,809 million, or 6.3% year on year, to RUB 26,984 million for the nine months ended 30 September 2014, compared to RUB 28,793 million for the nine months ended 30 September 2013. In the third quarter of 2014, total revenue fell by 11.1% to RUB 9,405 million. This decrease was primarily due to the deconsolidation of KDTS' revenue. If KDTS' contribution to the revenue for the first nine months of 2013 and the third quarter of 2013 is eliminated, the Company's total revenue would have increased by 10.1% year on year in nine months of 2014 and by 5.4% year on year in the third quarter of 2014, respectively, driven by an increase in integrated freight and transportation services.

Adjusted Revenue

The following table sets out adjusted revenue calculations for the nine months and the three months ended 30 September 2014 and 2013 respectively.

RUB million

9M 2014

9M 2013

Year on year change

RUB mln %

 

3Q 2014

3Q 2013

Year on year

change

RUB mln %

Total revenue

26,984

28,793

-1,809

-6.3%

 

9,450

10,631

-1,181

-11.1%

Cost of integrated freight forwarding and logistics services

11,572

9,977

+1,595

+16.0%

 

4,107

3,849

+258

+6.7%

Adjusted Revenue

15,412

18,816

-3,404

-18.1%

 

5,343

6,782

-1,439

-21.2%

Adjusted revenue (as defined above) declined by 18.1% year on year to RUB 15,412 million for the nine months ended 30 September 2014 from RUB 18,816 million for the nine months ended 30 September 2013. This was primarily due to the deconsolidation of KDTS' costs and revenues, as well as the challenging pricing environment in the Russian rail container transportation market. If KDTS' contribution to the adjusted revenue for the first nine months of 2013 is eliminated, the Company's adjusted revenue would have decreased by RUB 840 million, or 5.2% year on year, driven by lower average transportation tariffs.

Due to the reasons outlined above, adjusted revenue declined by 21.2% year on year to RUB 5,343 million in the third quarter of 2014. If KDTS' contribution to the adjusted revenue for the third quarter of 2013 is eliminated, the Company's adjusted revenue would have decreased by RUB 562 million, or 9.5% year on year, due to a reduction in transportation tariffs.

The following table sets out the components of adjusted revenue for the nine months ended 30 September 2014 and 2013, respectively, and outlines their relative contribution.

 

9M 2014

9M 2013

Year on year change

 

RUB mln

share, %

RUB mln

share, %

RUB mln

Percent

Rail-based container shipping services

4,082

26.5%

6,270

33.3%

-2,188

-34.9%

Adjusted integrated freight forwarding and logistics services

8,534

55.4%

7,452

39.6%

+1,082

+14.5%

Terminal services and agency fees

1,584

10.3%

3,051

16.2%

-1,467

-48.1%

Truck deliveries

734

4.8%

1,055

5.6%

-321

-30.4%

Other freight forwarding services

210

1.4%

446

2.4%

-236

-52.9%

Bonded warehousing services

179

1.2%

301

1.6%

-122

-40.5%

Other

89

0.6%

241

1.3%

-152

-63.1%

Total adjusted revenue

15,412

100%

18,816

100%

-3,404

-18.1%

The structure of adjusted revenue changed in the first nine months of 2014 compared to the corresponding period of 2013. The share of rail-based container transportation services in adjusted revenue fell from 33.3% for the first nine months ended 30 September 2013 to 26.5% for the first nine months ended 30 September 2014. The share of integrated freight forwarding and logistics services, net of cost of integrated freight forwarding and logistics services, grew to 55.4% from 39.6% as a result of the services mix shifting towards transportation under integrated logistics contracts. The share of terminal services and agency fees decreased from 16.2% to 10.3%, mainly due to the deconsolidation of KedenTransService's results.