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21.12.2012 NCSP Reports Solid 9 Months 2012 Results: EBITDA Grew by 16%, Net Profit Quadrupled, Net Debt Decreased by 10%

NCSP Group (LSE: NCSP, Moscow Exchange: NMTP) today reports its consolidated IFRS financial results for the 9 months ended 30 September 2012.

 

9M 2012 Operating and Financial Highlights

 

·         The Group’s total cargo turnover in the reporting period increased 3.5% year-on-year
(y-o-y) reaching 121 mln tonnes

·         Revenue amounted to US$ 786 mln, an increase of 0.5% y-o-y

·         EBITDA(1) increased by 16.1% y-o-y to US$ 469 mln

·         EBITDA margin improved substantially from 52% to 60%

·         Net Profit more than quadrupled y-o-y and reached US$ 320 mln

·         Net debt(2) / LTM EBITDA(3) declined from 4.3x as of the beginning of the year to 3.5x on 30 September 2012

 

US$ mln or %, unless stated otherwise

9M 2012

9M 2011

Change, %

Revenue

785.9

782.0

0.5%

Gross profit

466.5

403.1

15.7%

EBITDA

468.8

403.8

16.1%

EBITDA margin,%

59.7%

51.6%

8.1 p.p.

Net Profit

319.7

71.8

345.3%

Operating Cash Flow

344.1

199.2

72.7%

Capital expenditure

40.8

66.9

(39.0%)

 

30 September 2012

31 December 2011

 

Net Debt

2,142.0

2,378.7

(10.0%)

LTM EBITDA

615.3

550.3

11.8%

Net Debt / LTM EBITDA

3.5x

4.3x

(18.6%)

 

1) EBITDA is calculated as profit for the period before finance costs, income tax and D&A, interest income and foreign exchange gain/(loss), net.

2) Net debt is calculated as Total debt less Cash & cash equivalents.

3) LTM EBITDA is calculated as EBITDA for the twelve months preceding the end of the reporting period.

 

NCSP Group CEO Rado Antolovic said: “During the first 9 months of the year we continued to demonstrate solid performance in challenging market and weather conditions. We achieved a strong EBITDA by increasing throughput of high margin cargoes, namely grain and containers, and by strictly controlling costs

 

“Steady operating cash flow of over US$ 344 mln contributed to our sound financial position and a continued decrease in our net debt levels. As at 30 September 2012, net debt totalled US$ 2,142 mln, a 10% decrease from the beginning of 2012.

 

“NCSP Group enjoys a diverse cargo base, which enables us to quickly respond to changes in the market environment and maintain stable cargo throughput despite seasonal fluctuations or specific market segment downturns. Taking this as our fundamental advantage, we continuously seek to utilize our full potential to achieve better efficiency, renovate handling equipment, and add new capacities to capitalize on the fastest growing cargoes like containers.

 

“Our results for the first 9 months of 2012 reflect the underlying robustness of our business, and our successful efforts to improve operational efficiency, but macroeconomic uncertainty still remains a significant factor for the future. Looking forward, we retain our stance of cautious optimism.”

 

9M 2012 Operational Highlights

 

Total cargo turnover for 9M 2012 increased by 3.5% year-on-year and amounted to 121.3 mln tonnes. The flexibility of NCSP Group’s cargo base and universal nature of its port assets allowed the Group to offset the impact of volatile commodities markets and summer restrictions on railway deliveries to Novorossiysk Port caused by flooding in the Krasnodar region in July 2012.

 

9M 2012 cargo turnover

 

ths. tonnes

9 months ended

30 September

Change, ths. tonnes

Change, %

2012

2011(4)

Total

121,347.9

117,233.8

4,114.1

3.5%

including

 

 

 

 

Liquid cargo

99,979.9

97,625.3

2,354.6

2.4%

Bulk cargo

9,381.5

8,927.9

453.6

5.1%

General cargo

8,171.1

7,000.3

1,170.8

16.7%

Containers

3,815.4

3,680.3

135.1

3.7%

Containers, ths. TEU

465.4

447.7

17.7

4.0%

 

4) Volumes for PTP are included from 1 January 2011

 

Transhipment of crude oil in January-September 2012 amounted to 85.4 million tonnes, up 1.3% y-o-y. Handling of oil products grew by 7.2% to 13.9 million tonnes.

 

Total grain throughput in the reported period amounted to 6.4 million tonnes (an increase of 110.5% y-o-y) with very strong volumes in August and September.

 

Solid growth in ferrous metals (up 21.1% y-o-y to 6.5 million tonnes) and growth in other cargoes partially compensated for lower volumes of iron ore and mineral fertilizers.

 

To further diversify its cargo base, the Group started handling coal in August, which has been the major driver of turnover growth at Russian ports this year. In the reporting period, coal throughput totalled 63 thousand tonnes.

 

9M 2012 Financial Results

 

Revenue in the reporting period was almost flat y-o-y at US$ 786 mln. Revenue from handling grain, ferrous metals and containers demonstrated the most impressive growth, increasing 104.3%, 22.1% and 19.5% y-o-y, respectively.

 

The slight y-o-y decline in stevedoring services revenue was mainly due to a 35% decrease in low-margin bunkering operations.

 

US$ mln or %

9M 2012

9M 2011

Change, %

Revenue

785.9

782.0

0.5%

of which 

Stevedoring services

630.2

638.4

(1.3%)

Crude oil

218.1

215.6

1.2%

Bunkering

111.6

170.7

(34.6%)

Grain

95.8

46.9

104.3%

Oil products

67.0

67.7

(1.0%)

Ferrous metals

55.9

45.8

22.1%

Containers

39.3

32.9

19.5%

Ore and ore concentrate

6.7

12.8

(47.7%)

Other cargoes

35.8

46.0

(22.2%)

Additional port services

68.1

63.7

6.9

Fleet services

76.4

68.0

12.4

Other

11.2

11.9

(5.9%)

 

During 9M 2012 the Group’s cost of services declined 15.7% y-o-y to US$ 319.4 mln, while SG&A increased slightly compared to 9M 2011, amounting to US$ 57.1 mln. The decline in cost of services was primarily driven by a decrease in fuel costs from US$ 172 mln to US$ 107 mln (down 37.8% y-o-y) due to the reduction of bunkering operations and cost control measures. 

 

US$ mln or %

9M 2012

9M 2011

Change, %

Cost of services

319.4

379.0

(15.7%)

SG&A

57.1

54.7

4.4%

Total

376.5

433.7

(13.2%)

 

NCSP Group’s EBITDA increased materially from US$ 404 mln during 9M 2011 to US$ 469 mln during 9M 2012, primarily driven by a decrease in low-margin bunkering services.  EBITDA margin approached a best-in-class level of 60%.

 

The effect of the strengthening of the Russian rouble against US dollar during January-September 2012 on the Group’s assets and liabilities denominated in foreign currency resulted in a foreign exchange gain of US$ 96 mln for the reporting period (vs. a foreign exchange loss of US$ 150 mln during 9M 2011). Combined with stronger EBITDA performance, this drove Net Profit to US$ 320 mln (a 345% increase y-o-y).

 

The Group’s cash flow from operations increased by 73% y-o-y to US$ 344 mln for 9M 2012.  Capital expenditure for the period was US$ 41 mln, vs. US$ 67 mln during 9M 2011.  The increase in free cash flow brought NCSP Groups net debt down to US$ 2,142 mln as at 30 September 2012 from US$ 2,379 mln as at 31 December 2011. The Groups net debt/LTM EBITDA ratio reached 3.5x, substantially down from 4.3x as of the beginning of 2012.

 

Conference call and webcast

 

Today, on 21 December 2012, NCSP Group will host a conference call and webcast for investors & analysts at 17:00 Moscow time (13:00 London / 8:00 New York).

 

The conference call will be hosted by NCSP Group CEO Rado Antolovic, who will present the results and answer questions from conference call and webcast participants.

 

The call will be held in English.

 

Webcast link: http://www.media-server.com/m/p/8g5g5yey

 

Conference call dial-ins:

 

+7 499 272 4337                    Moscow

+44 (0) 20 3003 2666            London

+1 646 843 4608                    New York

 

Toll Free:

8 10 8002 1774011                Russia (Moscow only)

0808 109 0700                       UK

1 866 966 5335                      USA

 

Conference call password: Novorossiysk

 

About NCSP Group

 

NCSP Group is the largest Russian port operator in terms of cargo turnover. NCSP shares are traded on Russia's Moscow Exchange (ticker: NMTP) and on the London Stock Exchange in the form of GDRs (ticker: NCSP). 50.1% shares of PJSC “NCSP” belong to Novoport Holding Ltd, the beneficial owners of which are OJSC Transneft and Summa Group. NCSP Group cargo turnover in 2011 totalled 157 million tonnes. Consolidated revenue according to IFRS in 2011 totalled $1,050 million and EBITDA was $550 million. NCSP Group consolidates the following stevedoring and other companies: PJSC Novorossiysk Commercial Sea Port, LLC Primorsk Trade Port (since 2011), PJSC Novorossiysk Grain Terminal, OJSC Novorossiysk Ship Repair Yard, OJSC NCSP Fleet, OJSC NLE, OJSC IPP, CJSC Baltic Stevedore Company and CJSC SFP.

 

For more information please contact:

Alyona Silina, Public Relations

ASilina@ncsp.com

+7 (963) 6897102

 

Mikhail Borovikov, Investor Relations

MBorovikov@ncsp.com

+7 (495) 662 37 95


 

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