NCSP Released Consolidated Financial Results for 6M 2009
OREANDA-NEWS. October 2, 2009. Novorossiysk Commercial Sea Port (LSE: NCSP, RTS and MICEX: NMTP) announces interim condensed consolidated financial results (unaudited) for the six months ended 30 June
The full text of interim condensed consolidated financial statements (unaudited) for the six months ended 30 June 2009 of the NCSP Group are available on the Group’s website at: http://nmtp.info/en/ncsp/investors/
Key financial indicators of the Group (USD ‘000)
|
Indicator |
H1 2009 |
H1 2008 |
Change, percent |
|
Revenue |
334 169 |
314 662 |
6.2% |
|
Gross profit |
231 338 |
135 661 |
70.5% |
|
EBITDA* |
208 425 |
183 358 |
13.7% |
|
Adjusted EBITDA* |
240 386 |
161 141 |
49.2% |
|
Operating profit |
205 800 |
100 446 |
104.9% |
|
Finance costs |
(16 272) |
(15 553) |
4.6% |
|
Net profit |
128 900 |
84 542 |
52.5% |
|
Investments* |
(12 845) |
(47 880) |
-73.2% |
|
Net debt* |
187 295 |
378 717 |
-50.5% |
|
Net debt / Adjusted EBITDA* (annualized) |
0.39 |
1.18 |
-66.9% |
|
Cargo turnover (thousand tonnes) |
43.3 |
39.2 |
10.5% |
* The data are hereinafter provided according to the management reporting
Commenting on the financial results for the first half of 2009, NCSP Chairman Alexander Ponomarenko said: "The half year results show that we have retained our margin of strength formed in the first quarter 2009 and even increased it. Extra volumes of grain brought in by the new grain terminal, attraction of additional iron ore tonnage, and growing volumes of some other cargoes enabled us to offset the weak revenues from containers and some other cargoes and derived overall positive trends of the Group’s financial indicators in the first half 2009".
Revenue
NCSP Group revenues increased by USD 19.5 million and reached USD 334.2 million in the first half of 2009. The Group’s consolidated revenues grew by 6.2 percent against the first half of 2008 being affected by a number of positive and negative developments.
Growing cargo traffic and changes in the cargo mix were the key revenue drivers bringing it up by USD 50.2 million*. Thus, in H1 2009 versus comparative period last year grain volumes increased more than fourfold exceeding 10 percent of the Group’s total cargo turnover. Growth of iron ore and ore concentrate on 1.5 million tonnes has also contributed substantially to Group‘s revenue increase.
The increase in additional port services over the reporting period, including cargo storage and other services, added USD 3.5 million* of extra revenues compared to the first half of 2008.
Revenues from bunkering fuel sales declined as a result of almost double decrease of oil product prices in dollar terms in the first half of 2009 versus same period last year, which reduced Group’s consolidated revenues by USD 34.2 million while corresponding reduction in bunkering operations costs. At the same time the margin on bunkering fuel buy-and-sell operations remained at the last year’s level.
Operating expenses
According to the IFRS financial statements, the operating expenses (cost of sales + selling, general and administrative expenses – further “operating expenses”) totaled USD 128.2 million in the first half of 2009 versus USD 212.4 million in the same period of 2008.
As a result of decrease of bunkering fuel costs in purchase and resale operations, the cost of production dropped by USD 30.6 million* in the reporting period.
A reduction of depreciation charge was another factor that reduced the operating expenses by USD 24.7 million*. A higher depreciation charge was formed in the first half of 2008 by reassessment of the useful lives of certain fixed assets due to the completion of the significant investment program.
Additional decrease of the operating expenses in dollar terms was conditioned by the fluctuations of the exchange rate of the Russian ruble (functional currency) versus US dollar (presentation currency). Strong Ruble in the first half of 2008 resulted in higher operating expenses in dollar value in the respective period, while weaker Ruble in the first half of 2009 lead to a decrease in the operating expenses in dollar value.
Adjusted EBITDA
In order to ensure the comparability of the data for 2008 and 2009, the calculation of EBITDA for both periods was adjusted to the exchange rate differences resulted from Russian ruble versus US dollar exchange rate fluctuations. Hence, the adjusted EBITDA for the first half of 2009 amounted to USD 240.4 million* versus USD 161.1 million* in the first half of 2008.
The largest contribution to the increase in the adjusted EBITDA over the reporting period came from the growth of cargo traffic and changes in the cargo mix. Together, these factors led to USD 41.4 million* increase in adjusted EBITDA in the first half of 2009 compared to the same period in 2008.
Additional port services increased adjusted EBITDA by another USD 2.3 million* in the first half of 2009.
Reducing the volume of bunkering fuel purchase and resale operations in favor of handling of third party fuel volumes resulted in a moderate decrease of adjusted EBITDA by USD 3.6 million*.
Optimization of operating expenses, as well as Russian ruble devaluation effect resulted in adjusted EBITDA growth by USD 39.2 million* in the first half of 2009.
Credit Burden and Net Debt
As of June 30, 2009, the NCSP Group’s debt amounted to USD 462.7 million, with the current portion of long-term debt to be repaid within 12 months of USD 12.1 million or 2.6 percent. All debt of NCSP Group is nominated in US dollars.
As of reporting date, the Group’s net debt totaled USD 187.3 million*, which takes into account the company’s monetary assets:
§ cash and cash equivalents – USD 122.6 million;
§ deposits with maturities from three months to twelve months – USD 146.2 million;
§ promissory notes – USD 6.6 million.
Thus, the ratio of the net debt to the annualized adjusted EBITDA dropped to 0.39* in the first half of 2009.
According to the IFRS financial statements, the average effective rate on borrowings in the reporting period was 6.6 percent versus 7.02 percent as of 31 December 2008.
Implementation of the Investment program
The flexibility of NCSP Group’s investment program enabled us to adjust investments in the current projects timely to reflect the situation in the Russian foreign trade. Hence the investments in the first half of 2009 – purchase of fixed assets and investments in new projects (business plans) – totaled USD 12.8 million of which only USD 3.6 million* was spent on new projects.
Sheskharis oil terminal reconstruction project was continued in the reporting period. As of today all pipelines delivering crude oil and oil products from the tanks to the berth were replaced, new oil flow control and accounting system was launched in June 2009. The new system utilizes modern technologies to monitor and control oil flow and provides a higher level of environmental and industrial safety. At the moment NCSP continues reconstruction works on the main pier of the terminal and has already started the construction of the additional pier 1A to load oil and oil products onto 80-150 thousand tonnes tankers. The project completion is scheduled for 2012.
In May 2009 NCSP Group and a subsidiary of a large oil trader set up a joint venture (further “JV”) – LLC Novorossiysk Fuel Oil Terminal – where each partner holds 50%. The JV will be implementing the project to construct a 4 million tonnes per year terminal to handle heavy oil products (fuel oil). Currently project design is being developed to specify project’s costs and timeframe.
In June 2009 OJSC Fleet of NCSP (a subsidiary of PJSC NCSP) initiated a new project to expand the tug and towing business of NCSP Group in the ports of the Azov, Black Sea, and
Development of container capacity remains a priority investment for NCSP Group. At the moment design documentation is being developed for the project to construct a 1.2 million TEUs per year container terminal at the
Construction of the second stage of the container terminal at the
Conference Call for Investors and Analysts
The conference call for investors on NCSP’s H1 2009 financial results will be held on September 29, 2009 at 5:00 pm
The conference call will feature:
Mr. Vladimir Kayashev, Vice-President for Strategy;
Ms. Tatiana Chibinyaeva, Vice-President for Finance (CFO);
Mr. Roman Zinovyev, Vice-President for Corporate Finance and Investor Relations.
Media representatives are invited to participate as listeners.
A recording of the conference call will be made available on the NCSP website (www.nmtp.info) in the Press Center/News and Investors section.
Dial-in access:
Conference name / Participant Code: NSCP Financial Results H1 2009
Participant
Participant
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