DGAP-News: Far Eastern Shipping Company: Trading Update
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Far Eastern Shipping Company: Trading Update
30.05.2013 / 22:00
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN
THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR ANY OTHER
JURISDICTION WHERE TO DO SO WOULD BE UNLAWFULMay 30, 2013
Trading Update
Far-Eastern Shipping Company plc ('FESCO' or the 'Group') provides a
trading update with preliminary non-audited financial and operational
results for the quarter ended March 31, 2013.
Group Operational Results
Port Division
- Growth of import container cargo handling volumes (+24.2% y-o-y) and
decrease in cabotage cargo volumes (-17.9% y-o-y) resulted in VMTP
container cargo throughput growth by 8.2% y-o-y, reaching 106.7
thousand TEUs
- Automobiles and transportation vehicles throughput increased by 29.5%,
reaching 21.5 thousand units
- Non-container cargo throughput (excluding vehicles) decreased by 30.8%
to 610.9 thousand tons due to a reduction in metallurgical cargo
throughput
Rail Division
- Rail container transportation volumes amounted to 64.1 thousand TEUs
(up 5.3%). The increase in container cargo transportation driven by an
increase in railcar fleet dedicated to block train services was
partially offset by an increase in average transportation distance
- Rail cargo load decreased by 21.7% to 5.1 million tons. Rail cargo
turnover grew by 6.4% reaching 7.7 billion ton-kilometers due to 36.0%
growth in the average transportation distance. Marginal income was
negatively affected by the decrease in average railway speed within
Russian Railways' network, as well as a 1.8% decrease in non-container
railcar fleet
Liner and Logistics and Shipping Divisions
- Intermodal freight transportation volumes rose by 34.6% y-o-y to 60.2
thousand TEUs. The growth of intermodal freight transportation was
driven by increasing demand for the integrated logistical solutions
provided by FESCO Group, as well as the launch of new sea and rail
container services
- Bilateral sea container trade volumes reached 65.5 thousand TEUs
(+24.8% y-o-y). The growth of transportation volumes was driven by the
increased tonnage of FESCO vessels. In particular, two new vessels were
added to FESCO China Direct Line (FCDL), while the Korea Soviet Direct
Line (KSDL) is now serviced by a vessel with larger deadweight. In
February 2013, the Group launched four new sea container lines to/from
Turkey: FBSS (Russia - Turkey), FBSS FE (Southeast Asia - Turkey), FBSS
EU (Europe - Turkey) and FBSS MED (Mediterranean - Turkey)
- As a result of strengthening competition, domestic sea container
transportation volumes dropped by 14.6%, amounting to 12.8 thousand
TEUs
- Launch of the FESCO Ural Shuttle - a new regular container train from
Vladivostok to Yekaterinburg, which commenced operations in the second
half of 2012 contributed to the volume growth.
Group Financial Results
In 1Q 2013, reported total revenue increased by 4.7% y-o-y.
- Outperformance of Liner&Logistics Division, the major contributor to
Group's revenue, and Port Division was somewhat offset by lower
revenue in Rail and Shipping Divisions
- Increase in Port Division revenue was mainly driven by consolidation of
VMTP in 2Q2012
In 1Q 2013, reported EBITDA of the Group amounted to $48.4m
- Port
- 1Q 2013 EBITDA of $17.8m (up from $9.7m in 1Q 2012) with EBITDA
margin decrease from 48.3% to 38.0% due to consolidation of VMTP
with significant share of low marginal non-container cargo
- Rail
- The positive effect from growth of number of block trains for
container transportation was offset by overall weakening of the
rail market and sharp decline in transportation volumes of general
cargo in particular by gondola cars, resulting in Rail EBITDA
amounted to $28.4m
- Liner&Logistics
- The positive effect of intermodal transportation growth and
bilateral sea container transportation growth resulted in EBITDA
increase from negative in 1Q 2012 to $8.8m and EBITDA margin
increase by 5.5%
- Shipping
- Shipping performance was impacted by reduction of fleet form 50
vessels in 1Q 2012 to 27 vessels in 1Q 2013 (including
ice-breakers) and decline in global time-charter rates
- Division's business model has evolved from ship ownership and ship
management to a support function for the Liner&Logistics
Division.
Pro-Forma Debt
- Pro-forma debt amounted to $1,184m following the placement $550m 8.00%
Senior Secured Notes due 2018 and $325m 8.75% Senior Secured Notes due
2020 in May 2013. Pro Forma Net Debt increased to $960m. Pro Forma Net
Debt / LTM adjusted EBITDA ratio was 3.5x as of March 31, 2013. The
proceeds from the Notes were used for refinancing of
acquisition-related debt and pre-existing debt
- Positive effect of Senior Secured Notes placement includes improvement
of capital structure and credit portfolio management
Yuriy Gilts, President of FESCO, commented:
'In the first quarter, we continued the development of our flagship
container business and increased the volumes of container transportation
and intermodal services. On the other hand, visible reduction of the rail
market was expected by the Company, and we anticipate its recovery from the
second half of 2013 onwards. Despite of the challenging macroeconomic
environment, we keep positive outlook on the full-year 2013 results and do
not adjust our existing plans. We will proceed with the realization of our
long-term strategy, in particular growing share of containers in total
cargo mix. We expect to see some visible improvements starting from the
second quarter of 2013, because the first quarter of the year is
traditionally a low season for container transportation. We will also
continue to improve the efficiency of our business, primarily in our Port
division, including staff optimization, which is taking place throughout
2013. That will help us reduce costs and boost the Group's margins'.
FESCO Consolidated Group Financial Performance
$ millions 1Q 2013 1Q 2012 ChangeFESCO Consolidated Group Financial Position
Revenue 275.0 262.7 +4.7%
EBITDA 48.4 50.3 -3,8%
Margin 17.6% 19.1% -1.5%
Capital Expenditures 10 34.3 -70.8%
$ millions At 31 March, 2013(1)Total borrowings include the placement USD 550m 8.00% Senior Secured
Pro-Forma Total Debt1) 1,184
Cash 224
Pro Forma Net Deb t 960
Net Debt/ LTM Adj. EBITDA 3.5x
Notes due 2018 and USD 325m 8.75% Senior Secured Notes due 2020 in May
2013; exclude the $140m REPO loan against the shares of TransContainer
Divisional Financial Performance
$ millions 1Q 2013 1Q 2012 DynamicsFESCO operational results for 1Q2013
Port
Revenue 46.8 20.1 +132.8%
EBITDA 17.8 9.7 +83.5%
EBITDA margin 38.0% 48.3% -10.3%
Rail
Revenue 74.6 92.9 -19.7%
EBITDA 28.4 44.1 -35.6%
EBITDA margin 38.1% 47.5% -9.4%
Liner&Logistics
Revenue 158.3 128.3 +23.4%
EBITDA 8.8 -0.09 -
EBITDA margin 5.5% 0% +5.5 %
Shipping
Revenue 17.7 42.2 -58.1%
EBITDA 0.2 5.1 -96.1%
EBITDA margin 1.1% 12.1% -11.0%
1Q2013 1Q2012 DynamicsThis information is based on our preliminary financial results for the
Intermodal freight transportation (TEU) 60,187 44,711 +34.6%
Bilateral sea container trade (TEU) 65,484 52,452 +24.8%
Domestic sea container trade (TEU) 12,787 14,980 -14.6%
Reefer transportation (TEU) 11,032 11,703 -5.7%
Ro-Ro transportation (TEU) 12,887 12,128 +6.3%
VMTP container throughput (TEU)
Import 45,987 37,022 +24.2%
Export 39,367 35,577 +10.7%
Cabotage 21,391 26,067 -17.9%
VMTP non-container cargo throughput (excluding 610.9 882.7 -30.8%
vehicles) (thousand tons)
Automobiles and transportation vehicles 21,543 16,638 +29.5%
throughput (units)
Rail container transportation («Russkaya 64,130 60,895 +5.3%
Troyka»and«Transgarant») (TEU)
Rail cargo load (million tons) 5.1 6.5 -21.7%
Rail cargo turnover (billion ton-kilometers) 7.7 7.2 +6.4%
quarter ended 31 March 2013 that are not fully comparable with our audited
consolidated financial statements or unaudited interim condensed
consolidated financial statements. Such information has been prepared by,
and is the responsibility of, our management, and has not been audited,
reviewed or verified, nor have any procedures been completed by our
auditors with respect thereto, and you should not place undue reliance
thereon. It is subject to confirmation in our audited consolidated
financial statements for the quarter ended March 31, 2013. This business
update has neither been reviewed nor reported on by FESCO's external
auditors.
These materials are not for distribution, directly or indirectly, in or
into the United States (including its territories and possessions, any
State of the United States and the District of Columbia). These materials
are not an offer or solicitation to purchase or subscribe for securities in
the United States. Securities may not be offered or sold in the United
States absent registration with the United States Securities and Exchange
Commission or an exemption from registration under the U.S. Securities Act
of 1933, as amended. FESCO has not registered and does not intend to
register any securities in the United States or to conduct a public
offering of securities in the United States.
This document is only being distributed to and is only directed at (i)
persons who are outside the United Kingdom or (ii) to investment
professionals falling within Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') or (iii)
high net worth entities, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order (all such
persons in (i), (ii) and (iii) above together being referred to as
'relevant persons'). Any securities described herein are only available
to, and any invitation, offer or agreement to subscribe, purchase or
otherwise acquire such securities will be engaged in only with, relevant
persons. Any person who is not a relevant person should not act or rely on
this document or any of its contents.
Information contained in this document is not an offer, or an invitation to
make offers, sell, purchase, exchange or transfer any securities in Russia
or to or for the benefit of any Russian person, and does not constitute an
advertisement of any securities in Russia. Any securities referred to
herein have not been and will not be registered in Russia or admitted to
'placement' and/or 'public circulation' in Russia. Such securities are not
intended for 'placement' or 'circulation' in Russia except and to the
extent permitted by Russian law.
This press release may include 'forward-looking statements'. Such
statements contain the words 'anticipate', 'believe', 'intend', 'estimate',
'expect', 'will', 'may', 'project', 'plan' and words of similar meaning.
All statements included in this press release other than statements of
historical facts, including, without limitation, those regarding financial
position, business strategy, plans and objectives of management for future
operations (including development plans and objectives) are forward-looking
statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors that could cause actual
results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on
numerous assumptions regarding present and future business strategies and
the relevant future business environment. These forward-looking statements
speak only as of the date of this press release, and the Group expressly
disclaims to the fullest extent permitted by law any obligation or
undertaking to disseminate any updates or revisions to any forward-looking
statements contained herein to reflect any change in expectations with
regard thereto or any change in events, conditions or circumstances on
which any such statement is based
About FESCO
FESCO is one of the largest Russian port owners and operators with
integrated rail and logistics businesses and primarily focused on
intermodal deliveries of containerized cargo. The Group owns port, rail and
shipping assets, which allow it 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 controls the Commercial Port of Vladivostok, which has throughput
capacity of 3.9 million tons for general cargo and oil products, 150,000
vehicles and over 600,000 TEUs in containers. FESCO is one of Russia's top
10 private railcar operators providing services under the Transgarant
(100%) and Russkaya Troika (50% JV with Russian Railways) brands. The Group
owns a fleet of vessels mostly deployed through own line and logistics
operations. In 2012, consolidated revenue of FESCO Group reached USD 1,197
million.
IR contacts:
Galina Shilina
Director, Corporate Communications
+7 (495) 926 80 00 ext.11007
gshilina(at)fesco.com
Ekaterina Semenova
IR manager
+7 (495) 926 80 00 ext.11058
esemenova(at)fesco.com
PR contact:
Tatiana Vishnyakova
Deputy Director, Corporate Communications
+7 (495) 926 80 00 ext.11067
tvishnyakova(at)fesco.com
End of Corporate News
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