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29.08.2014 NCSP Group Consolidated Financial Results to IFRS for H1 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 six months ending 30 June 2014.

NCSP Group consolidated revenue in H1 2014 increased 9.3% year-on-year to $511.1 million. Cost of sales reduced by 1.8%, SG&A expenses reduced 15.6% year-on-year. EBITDA for H1 2014 increased 21.1%* year-on-year reaching $304.8 million*, while margin increased by 5.8* percent points to 59.6%.* Net profit totaled $137.9 million versus $13.9 million same period last year.

Commenting on H1 consolidated financials PJSC NCSP CEO Sultan Batov said:

«Growth of Group’s revenue in H1 2014 was driven by a mix of factors, including increase of grain volumes to 2.5* million tonnes from 478* thousand tonnes in H1 2013; oil products volumes growing 14.5%* year-on-year; ferrous metals up 9.4%*; sugar up 45.2%*; container traffic in TEU up 9.9%* year-on-year supported by growing share of loaded containers and increased handling tariff for these, as well as increased tariffs on crude oil, oil products, coal, and perishable cargo.

Decline of crude oil volumes by 8.0* million tonnes or 16.8%* year-on-year produced the most material negative effect on the revenue.

Besides growing revenues, increase in net profit was driven by reduction of foreign exchange losses to $43.4 million in H1 2014 from $129.2 million in H1 2013».


Key operating and financial metrics


(in millions of US dollars, unless otherwise indicated)

H1 2014

H1 2013

Cargo turnover, million tonnes*

68.7

72.1

Revenue

511.1

467.8

from stevedoring services

402.3

362.9

from additional port services

56.0

45.8

from fleet services

44.1

50.9

other

8.7

8.2

Cost of sales

215.2

219.2

SG&A

33.6

39.8

EBITDA*

304.8

251.6

EBITDA margin (%)*

59.6%

53.8%

Profit for the period

137.9

13.9

NCSP Groups consolidate financial information to IFRS for H1 2014 can be downloaded from the Groups website at http://nmtp.info/en/holding/investors/reporting/msfo/

Revenue

NCSP Groups consolidated revenue in H1 2014 increased by $43.3 million or 9.3% year-on-year reaching $511.1 million.

Stevedoring revenue increased by $39.5 million or 10.9% year-on-year and reached $402.3 million; revenue from additional port services increased by $10.3 million or 22.4% year-on-year due to growth in certain cargoes, while fleet services revenue reduced by $6.9 million or 13.5% year-on-year; other revenue changed immaterially.

Key driver of stevedoring revenue growth was the increase of grain volumes from 478* thousand tonnes in H1 2013 to 2.5* million tonnes in H1 2014, causing grain revenue to hike by $25.8* million.

Revenue from oil products increased by $13.8* million of 22.2%* year-on-year following an increase of volumes by 1.9* million tonnes or 14.5%* year-on-year.

Revenue from ferrous metals, raw sugar, and timber increased in line with growing volumes by $4.0* million, $1.9* million, and $1.6* million respectively.

Revenue from perishable cargo and coal increased by $1.5* million and $1.7* million driven by volumes and tariff increase respectively.

Container revenue was up $5.9* million supported by increase in volumes by 32* thousand TEU or 9.9%* year-on-year and growing share of loaded containers, and increased handling tariff for these.

Decline of crude oil volumes by 8.0* million tonnes or 16.8%* year-on-year produced the key negative effect on the stevedoring revenue in the amount of $16.7* million.


Costs

Groups cost of sales did not change materially in H1 2014, while SG&A expenses were down by $6.2 million or 15.6% year-on-year.


EBITDA

Groups EBITDA increased 21.1%* year-on-year in H1 2014 reaching $304.8* million. Increase in stevedoring revenue driven by changes in the cargo mix and selected tariff improvements was key EBITDA driver contributing $48.5* million. Growing revenue from additional port services added another $2.4* million to EBITDA, and growing profits from Novorossiysk Fuel Oil Terminal JV contributed $2.3* million. EBITDA margin increased by 5.8* percent points to 59.6%.*


Profit for the period

In H1 2014 Group posted net profit of $137.9 million versus $13.9 million in H1 2013. Besides growing revenues from stevedoring services and additional port services, increase in net profit was supported by a reduction of foreign exchange losses down to $43.4 million in the reporting period from $129.2 million in H1 2013.

Reduction of foreign exchange losses was conditioned by a repayment of $150 million on the $1 950 million Sberbank loan in Q2 2014, and fluctuations of the ruble/dollar exchange rate. In H1 2014 the ruble depreciated only by 0.9 ruble, while in H1 2013 the depreciation comprised 2.34 rubles which resulted in substantially larger FX losses.


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 2013 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


* According to management accounts.

 

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