DGAP-News: Far Eastern Shipping Company: 1H2013 trading update
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Far Eastern Shipping Company: 1H2013 trading update
29.08.2013 / 18:18
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August 29, 2013
1H2013 trading update
FESCO Transportation Group (MICEX-RTS: FESH) provides a trading update with
consolidated financial and operational results for the six months ended
June 30, 2013.
Group Operational Results
Port Division
In 1H2013, import container cargo throughput grew to 97.6 thousand TEUs (up
8.8% y-o-y), export container cargo throughput grew to 78.5 thousand TEUs
(up 1.8% y-o-y), and cabotage container cargo throughput decreased by 10.1%
to 47.7 thousand TEUs on the back of the decrease in domestic sea service
lines.
Automobiles and transportation vehicles throughput increased by 23.5%
amounting to 47.9 thousand units.
Non-container cargo throughput (excluding vehicles) declined by 41.0% to
1.0 mln tons driven by the visible reduction in export volumes of ferrous
metals and coke.
Rail Division
In 1H2013, rail container transportation volumes were up 5.3% y-o-y
reaching 136.4 thousand TEUs. The growth was above the market average due
to a growing number of block trains operated by the Group and an increased
fleet of fitting platforms. The volume of containers delivered by block
trains increased by 34% y-o-y.
Rail cargo load decreased by 19.0% to 10.2 million tons on the back of the
continuing weakness of Russia's rail transportation market and gondola
market in particular, as well as the reduction of the average
transportation speed within the RZhD network. Rail cargo turnover grew by
8.9% y-o-y due to growth in the average transportation distance.
Liner and Logistics and Shipping Divisions
In the reporting period, intermodal freight transportation volumes rose by
27.1% y-o-y to 125.1 thousand TEUs. The growth of intermodal freight
transportation is driven by solid demand for the integrated logistical
solutions provided by FESCO Group.
In 1H2013, bilateral sea container trade volumes reached 181.2 thousand
TEUs, an increase of 8.9% y-o-y driven mostly by import. In June 2013, the
Group extended its FESCO Black Sea Shuttle service (FBSS) by adding the
call to the second largest Turkish port Izmir. The volume of domestic sea
container transportation declined by 11.0% y-o-y to 28.9 thousand TEUs due
increased competition, especially on the Vladivostok-Kamchatka and
Vladivostok-Sakhalin lines. To strengthen its competitive positions, FESCO
acquired two ice class general cargo vessels - Pevek in March 2013 and
Posyet in April 2013, which started servicing its cabotage service lines in
3Q2013.
Ro-ro transportation grew by 7.9% and reached 28.8 thousand units.
As of June 30, 2013 the Group operated a fleet of 24 vessels deployed
through the FESCO sea service lines and 4 ice-breakers leased-in under
long-term contracts.
Group Financial Results
In 1H2013, the reported total revenue declined by 4.3% to $557.3m as result
of mixed top line divisional performance.
EBITDA increased from $97.1m in 1H2012 to $99.4 in 1H2013. EBITDA margin
increased by 1.1 pp to 17.8%.
- Port Division
- EBITDA increased by 15.5% from $38.8m to $44.8m due to the
consolidation of VMTP. EBITDA margin decreased from 48.6% to 40.8%
due to the increased share of low marginal cargo after
consolidation of VMTP
-Rail Division
- EBITDA decreased by 43.2% from $93.5m to $53.1m. Although the
container transportation performed well, the decrease in general
cargo volumes negatively affected the divisional results along with
a fall in market average income of railcars (particularly for
gondolas). EBITDA margin decreased from 50.3% to 37.7%
- Liner and Logistics Division
- EBITDA rose by 33% to $17.6m following strong demand for intermodal
logistical solutions offered by FESCO. EBITDA margin increased from
4.6% to 5.4%
- In the Shipping Division EBITDA remains negative
Pro-forma consolidated debt slightly decreased to $1,150m with the balance
sheet cash of $191m as of June 30, 2013:
- Consolidated debt includes the placement of $550m 8.00% Senior Secured
Notes due 2018 and $325m 8.75% Senior Secured Notes due 2020 in May
2013, as well as RUB 5 bln (app. $153m) bonds, placed to refinance the
Group's acquisition-related and pre-existing debt
- Completed refinancing resulted in more efficient capital structure and
currency mix
- As of June 30, 2013, Pro-forma Net Debt / LTM adjusted EBITDA ratio was
4.0x.
Ruslan Alikhanov, FESCO President and CEO commented:
'Although the continuing weakness in the rail market negatively affected
our results, our strategy remains unchanged. We continue to successfully
grow container business in both rail and port. In the next quarters we will
be focusing on costs competitiveness and improvement of our operational
performance'.
FESCO Consolidated Group Financial Performance
$ millions 1H 2013 1H 2012 Change(1) On adjusted basis for consolidation of port in 1Q2012, disposal of
Revenue(1) 557.3 582.5 -4.3%
EBITDA(1) 99.4 97.1 +2.4%
EBITDA margin(1) 17.8% 16.7% +1.1 pp
Capital Expenditures 25.2 46.5 -45.8%
vessels and non-recurring expenses the 1H2013 adj. revenue decreased
by 5% and adj.EBITDA decreased by 26% y-o-y.
FESCO Consolidated Group Financial Position
$ millions At 30 June, 2013(2)Total borrowings include the placement USD 550m 8.00% Senior Secured
Pro-forma total Debt(2) 1,150
Cash 191
Pro-forma net Debt 959
Pro-forma net Debt/ LTM Adj. EBITDA 4.0x
Notes due 2018 and USD 325m 8.75% Senior Secured Notes due 2020 in May
2013; RUB 5bln rubl bonds in June 2013 and exclude the $140m REPO loan
against the shares of TransContainer
Divisional Financial Performance
$ millions 1H 2013 1H 2012 Dynamics(3) On adjusted basis for consolidation of port in 1Q2012 and non-recurring
Port
Revenue(3) 109.9 79.9 +37.5%
EBITDA(3) 44.8 38.8 +15.5%
EBITDA margin(3) 40.8% 48.6% -7.8 pp
Rail
Revenue 140.9 185.9 -24.2%
EBITDA 53.1 93.5 -43.2%
EBITDA margin 37.7% 50.3% -12.6 pp
Liner&Logistics
Revenue 327.6 284.6 +15.1%
EBITDA 17.6 13.2 +33.3%
EBITDA margin 5.4% 4.6% +0.8 pp
Shipping
Revenue(4) 28.7 74.9 -61.7%
EBITDA(4) -3.9 -2.7 -
EBITDA margin(4) negative negative -
expenses 1H2013 port adj.EBITDA decreased by 12% y-o-y with adj.EBITDA
margin decreased to 42%
(4) On adjusted basis for disposal of vessels and non-recurring expenses
the 1H2013 shipping adj.EBITDA slightly decreased
FESCO operational results for 1H2013
1H2012 1H2013 DynamicsAbout FESCO
Intermodal freight transportation (TEU) 98 399 125 054 +27.1%
Bilateral sea container trade (TEU) 166 461 181 203 +8.9%
Domestic sea container trade (TEU) 32 430 28 871 -11.0%
Reefer transportation (TEU) 23 152 22 206 -4.1%
Ro-Ro transportation (TEU) 26 653 28 760 +7.9%
VMTP container throughput (TEU) 219 919 223 802 +1,8%
Import 89 706 +8,8%
Export 77 114 97 563 +1,8%
Cabotage 53 099 78 498 -10,1%
47 741
VMTP non-container cargo throughput (excluding 1 797 1 061 -41.0%
vehicles) (thousand tons)
Automobiles and transportation vehicles 38 814 47 922 +23.5%
throughput (units)
Rail container transportation («Russkaya 129 470 136 369 +5.3%
Troyka»and«Transgarant») (TEU)
Rail cargo load (million tons) 12,6 10,2 -19,0%
Rail cargo turnover (billion ton-kilometers) 14,8 16,1 +8,9%
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 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, revenue of FESCO Group reached USD 1,197 million.
End of Corporate News
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