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06.06.2014 NCSP Group Consolidated Financial Results to IFRS for Q1 2014

Novorossiysk Commercial Sea Port Group (“NCSP Group” or the Group) (LSE: NCSP, Moscow Exchange: NMTP) today announces its consolidated IFRS financial results for the three months ending 31 March 2014.


NCSP consolidated revenue in Q1 2014 increased 6.7% year-on-year to $255.4 million.

Cost of sales did not change materially, SG&A expenses reduced 12.0% year on year.

EBITDA increased 10.4% year-on-year reaching $151.7 million.


Commenting on Q1 consolidated financials PJSC NCSP CEO Yuriy Matvienko said:

«In the first quarter of 2014 NCSP Group succeeded in growing its revenue and EBITDA through quality improvements in the cargo mix, increased volumes or certain cargo, partially thanks to the effect of the terminals’ re-equipment and operating efficiency boost programs.

Recovery in grain volumes was the key driver for revenue growth contributing $15.8 million of extra revenue. Revenue from oil products and container handling increased by $2.7 million and $2.2 million on the back of volumes growth.

On the other hand, these positive developments were partially mitigated by the $10.2 million reduction of crude oil revenues».


Key operating and financial metrics (in millions of US dollars, unless otherwise indicated)

Q1 2014

Q1 2013

Cargo turnover, millions tonnes*

33.62

36.97

Revenue

255.4

239.4

Cost of sales

(106.7)

(106.1)

SG&A

(16.1)

(18.3)

EBITDA*

151.7

137.3

EBITDA margin (%)*

59.4%

57.4%

LTM EBITDA *

524.8

-

(Loss)/profit for the period

(32.2)

37.8

31-03-2014

31-12-2013

Net debt*

1673.2

1765.0

Net debt/LTM EBITDA*

3.19

* Management accounts

NCSP Groups consolidate financial information to IFRS for Q1 2014 can be downloaded from the Groups website at http://nmtp.info/en/holding/investors/reporting/msfo/


Revenue

NCSP Groups consolidated revenue in Q1 2014 increased by $16.02 million or 6.7% year on year reaching $255.4 million.

Stevedoring revenue increased by $16.2 million or 9.0% year on year and reached $200.9 million; revenue from additional port services increased by $3.1 million, while fleet services revenue reduced by $3.5 million; other revenue changed immaterially.

Growth in stevedoring revenue was primarily driven by grain volumes, which increased from 154 thousand tonnes in Q1 2013, when exports ceased due to poor crop and high domestic prices, to 1.5 million tonnes in Q1 2014, causing grain revenue to hike from $1.4 million to $17.2 million respectively.

Revenue from oil products transshipment increased by $2.7 million and revenue from container handling was up $2.2 million following increase in volumes by 0.4 million tonnes and 8 thousand TEU respectively.

Revenue from crude oil handling reduced by $10.2 million following a 7 million tonnes reduction in volumes.

Mixed movements in volumes of other cargo and services resulted in a $1.3 million reduction of stevedoring revenue.


Costs

Groups cost of sales did not change materially in Q1 2014, while SG&A expenses were down by $2.2 million or 12.0% year on year. Weakening if the Russian ruble against US dollar positively affect Groups ability to control costs.


EBITDA

Groups EBITDA increased 10.4% year-on-year in Q1 2014 and reached $151.7 million. EBITDA increase was mostly driven by growth of stevedoring revenue from quality improvement in the cargo mix, including growing volumes of grain, oil products, and containers, which increased EBITDA by $18.2 million. Net change in costs (excluding bunkering) and movements in additional port services and fleet services revenue produced negative effect on EBITDA in the amount of $3.8 million.


(Loss)/profit for the period

In Q1 2014 the Group posted net loss of $32.2 million.

This is actually a non-monetary loss, resulting from foreign exchange losses accrued on Groups assets and liabilities nominated in foreign currency and revaluated at the exchange rate both at the beginning and at the end of the reporting period in Russian accounts, which is then translated to IFRS accounts. Major amount of FX losses is charged on the $1.95 billion loan from Sberbank.

In the reporting period the ruble depreciated against the US dollar from 32.7 as of 31 December 2013 to 35.7 as of 31 March 2014.

Net foreign exchange losses comprised $135.9 million.



1Q 2014 IFRS Results

Financial statements

Consolidated Financial Information For the Three Months Ended 31 March2014

Presentation1Q2014 IFRS Results Presentation




About NCSP Group

NCSP Group is the largest port operator in Russia and the third-largest in Europe, 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). NCSP Group cargo turnover in 2013 totalled 141 million tonnes. Consolidated revenue to IFRS in 2012 totalled USD 928 million and EBITDA was USD 510 million. NCSP Group consolidates the following companies: PJSC Novorossiysk Commercial Sea Port, LLC Primorsk Trade Port, PJSC Novorossiysk Grain Terminal, OJSC Novorossiysk Ship Repair Yard, OJSC NCSP Fleet, OJSC NLE, OJSC IPP, CJSC Baltic Stevedore Company, and CJSC SFP.


Contacts

Kristina Senko, Public Relations; KSenko@ncsp.com

Mikhail Shchur, Investor Relations; MShchur@ncsp.com

 

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