GLPR.L Regulatory News (GLPR)

For immediate release 9 September 2016

Global Ports Investments PLC

2016 Interim Results

Global Ports Investments PLC ("Global Ports" or the "Company", together with its subsidiaries and joint ventures, the "Group" or the "Global Ports Group"; LSE ticker: GLPR) today announces its operational results and publishes its interim condensed consolidated financial information (unaudited) for the six-month period ended 30 June 2016. http://www.rns-pdf.londonstockexchange.com/rns/4050J_-2016-9-9.pdf

Certain financial and operational information which is derived from the management accounts is marked in this announcement with an asterisk {*}. Information (including non-IFRS financial measures) requiring additional explanation or terms which begin with capital letters and the explanations or definitions thereto are provided at the end of this announcement. 

SUMMARY

Despite a positive second quarter, and some recent encouraging signs of macroeconomic recovery, the Russian container market remained challenging during the first half of 2016. Global Ports' container throughput in Russia declined by 22%* to 647 thousand TEU*, largely driven by significant volume leakage in the second half of 2015. The Group's market share in the first half of 2016 remained at broadly the same level as in December 2015.

In the reporting period, the Group continued to focus on new revenue streams, operational efficiency, free cash flow generation and deleveraging. As a result of these actions, Global Ports' Adjusted EBITDA was USD 111.5 million* with strong Free Cash Flow of USD 91.1 million*[1]. The Group decreased its Total Debt by another USD 43.8 million*.

With the aim of increasing financial flexibility and diversification of its funding sources, the Group refinanced more than half of its debt portfolio via a number of successful public transactions on the international and Russian debt markets. As a result of these transactions, the share of public borrowings and fixed rate borrowings increased to 51% and 71% of the debt portfolio respectively.

Group financial and operational highlights for the first half of 2016

● The Russian container market turned from negative in the first quarter (-5% y-o-y) to positive in the second quarter (+1% y-o-y) after 7 consecutive quarters of decline. This resulted in a 2% year-on-year decline overall in the first half. Total container throughput in the Russian container market for the first half was 1,876 thousand TEU*.

● The Group's gross marine container throughput in Russia declined 22%* to 647 thousand TEU* in the six months ended 30 June 2016 compared to 834 thousand TEU* in the six months ended 30 June 2015. The decline in throughput was largely driven by the decline in overall market volumes, as well as the Group's disciplined commercial strategy and increased competition, which resulted in a reduction in market share in the second half of 2015.

● In order to improve the utilization of the available space at its terminals, the Group continued to focus on increasing bulk cargo volumes in the first half of 2016. As a result, the handling of bulk cargo at marine terminals in the six months ended 30 June 2016 increased by 414 thousand tonnes*, or 79%*, to 939 thousand tonnes*, compared to 525 thousand tonnes* in the six months ended 30 June 2015.

● Container cargo throughput at the Group's inland terminals increased in the six months ended 30 June 2016 by 58%* year on year to 142 thousand TEU*, due to ongoing containerization in Russia and the Group's efforts to attract container volumes for exporting cargoes out of Russia.

● Revenue was 23.6% lower than in the first half of 2015 at USD 163.7 million while first-half Adjusted EBITDA declined 27.3%* to USD 111.5 million* mainly due to lower container throughput.

● The Group reduced its capital expenditures on a cash basis by 3% to USD 4.6 million in the first half of 2016. The low level of CAPEX was achieved without compromising service quality, reliability or the safety of operations at the Group's already well invested terminals.

● Free Cash Flow remained at a high level with USD 91.1 million* generated during the period, although this was 29.5%* below what was achieved in the first half 2015 due to the decline in Cash generated from operations.

● The Group continued to focus on deleveraging: Net Debt[2] reduced by USD 39.9 million* in the first half of 2016. The Group's Total Debt has decreased by over USD 336 million* since the NCC Group acquisition at the end of 2013.

● The Group successfully refinanced half of its debt portfolio by issuing a USD 350 million Eurobond with maturity in January 2022 and three 5-year tranches of Russian rouble denominated bonds[3] swapped to USD for an aggregate amount of approximately USD 209 million*. This allowed Global Ports to achieve greater financial flexibility, extend its maturity profile, and increase the share of fixed-rate borrowings to 71%* of its portfolio.

● In line with statements made in March 2015, the Group continues to prioritize deleveraging over dividend distribution in order to ensure the long-term financial flexibility of the Company in the current market environment.

Vladislav Baumgertner, CEO of Global Ports Management, commented:

"While we began to see some encouraging signs during the second quarter, the Russian container market remained sluggish for the first half as a whole. Within this context we maintained our focus on driving efficiencies within our business while ensuring that we continue to generate strong levels of free cash flow.

The Group successfully continued the deleveraging process, which has already seen us repay more than USD 336 million* in debt since the NCC acquisition less than three years ago, a testament to the Group's ability to generate cash even in difficult markets. We have also made significant progress in our efforts to increase the Group's financial flexibility having entered the public debt markets while extending our debt maturity profile.

There are some early indications of an improvement in consumer sentiment in Russia and the broader macro-economic environment. At the same time, the container market registered growth during the second quarter of 2016, the first positive quarter in over two years. While this allows us to be cautiously optimistic for the future, competition in the sector is strong and so the overall market backdrop remains challenging."

Further information is available in the following Appendices:

● Appendix 1: Results of operations for Global Ports for the six months ended 30 June 2016;

● Appendix 2: Reconciliation of Additional data (Non IFRS) to the Interim Consolidated Financial Information;

● Appendix 3: Definitions and Presentation of Information; and

● Appendix 4: Investor Presentation. http://www.rns-pdf.londonstockexchange.com/rns/4050J_1-2016-9-9.pdf

Other

Pursuant to Article 2.1(i) (ii) of the Transparency Directive (2004/109/EC) and Rule 6.4.2 of the Disclosure and Transparency Rules of the UK Financial Services Authority, the Company confirms that it has chosen the United Kingdom as its Home State.

Downloads

The consolidated financial statements for the first half 2016 for Global Ports are available for viewing and downloading at www.globalports.com.

Analyst and Investor Conference call

The publication of these results will be accompanied by an analyst and investor conference call hosted by:

· Vladislav Baumgertner, Chief Executive Officer, Global Ports Management LLC;

· Mikhail Loganov, Chief Financial Officer, Global Ports Management LLC;

· Evgeny Zaltsman, Head of Business Development, Global Ports Management LLC;

· Arnout Dirk Lugtmeijer, General Manager of Vopak E.O.S.;

· Dirk van Assendelft, General Manager of Multi-Link Terminals;

· Alexander Iodchin, Managing Director of Global Ports Investments PLC.

Date: Friday, 9 September 2016

Time: 14.00 UK / 09.00 US (east coast) / 16.00 Moscow

To participate in the conference call, please dial one of the following numbers and ask to be put through to the "Global Ports" call:

Standard International Access: +44 (0) 20 3003 2666

UK Toll Free: 0808 109 0700

USA Toll Free: +1 866 966 5335

Russia Toll Free: 8 10 8002 4902044

ENQUIRIES

Global Ports Investor Relations

Mikhail Grigoriev / Yana Gabdrakhmanova

+357 25 313 475

Email: ir@globalports.com

Global Ports Media Relations

Anna Vostrukhova

+357 25 313 475

E-mail: media@globalports.com 

Teneo Strategy

Laura Gilbert / Sabine Pirone

+44 20 7240 2486

E-mail: globalports@teneostrategy.com

NOTES TO EDITORS

Global Ports Investments PLC is the leading operator of container terminals in the Russian market.

Global Ports' terminals are located in the Baltic and Far East Basins, key regions for foreign trade cargo flows. Global Ports operates five container terminals in Russia (Petrolesport, First Container Terminal, Ust-Luga Container Terminal[4] and Moby Dik[5] in the Russian Baltics, and Vostochnaya Stevedoring Company in the Russian Far East) and two container terminals in Finland[6] (Multi-Link Terminals Helsinki and Multi-Link Terminals Kotka). Global Ports also owns inland container terminals Yanino Logistics Park[7] and Logistika-Terminal, both located in the vicinity of St. Petersburg, and has a 50% stake in the major oil products terminal AS Vopak E.O.S.[8] in Estonia.

Global Ports' consolidated revenue for the first half 2016 was USD 163.7 million and Adjusted EBITDA was USD 111.5 million*. The total marine container throughput was 771 thousand TEU* in the first half of 2016.

Global Ports' major shareholders are Transportation Investments Holding Limited (operating under the brand name of N-Trans), one of the largest private transportation and infrastructure groups in Russia (30.75%), and APM Terminals B.V. (30.75%), whose core expertise is the design, construction, management and operation of ports, terminals and inland services. APM Terminals operates a global terminal network of 72 ports and 140 inland services facilities, giving the company a global presence in 69 countries. 20.5% of Global Ports shares are traded in the form of global depositary receipts listed on the Main Market of the London Stock Exchange (LSE ticker: GLPR).

For more information please see: www.globalports.com

LEGAL DISCLAIMER

Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of Global Ports. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" or the negative of such terms or other similar expressions. Global Ports wishes to caution you that these statements are only predictions and that actual events or results may differ materially. Global Ports does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of Global Ports, including, among others, general political and economic conditions, the competitive environment, risks associated with operating in Russia and market change in the industries Global Ports operates in, as well as many other risks related to Global Ports and its operations.

Appendix 1: Results of operations for Global Ports for the six months ended 30 June 2016

The financial information presented in this appendix is extracted from the Interim condensed consolidated financial information (unaudited) of the Global Ports for the six month period ended 30 June 2016, prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). This appendix also includes certain non-IFRS financial information, identified using capitalised terms below. For further information on the calculation of such non-IFRS financial information, see Appendix 2 (Definitions and Presentation of Information) and the section entitled "Non-IFRS Measures: Adjusted EBITDA and Adjusted EBITDA Margin" below. Readers of this appendix should read the entire announcement together with the Global Ports Interim condensed consolidated financial information (unaudited) also released on the date hereof, and not just rely on the summary information set out below.

Certain financial and operational information which is derived from the management accounts is marked in this announcement with an asterisk {*}.

Rounding adjustments have been made in calculating some of the financial and operational information included in this presentation. As a result, numerical figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that precede them.

Results of operations of Global Ports for the six-month period ended 30 June 2016 and 30 June 2015

The following table sets out the principal components of the Group's consolidated income statement and certain additional non-IFRS data of the Group for the six months ended 30 June 2015 and 2016.

Revenue

Revenue decreased by U.S.$50.6 million, or 23.6%, from U.S.$214.3 million in the six months ended 30 June 2015 to U.S.$163.7 million in the six months ended 30 June 2016[9]. This decrease was primarily due to the decrease in throughput.

Cost of sales

Cost of sales decreased by U.S.$61.2 million, or 52.6%, from U.S.$116.3 million in the six months ended 30 June 2015 to U.S.$55.1 million in the six months ended 30 June 2016. This decrease was primarily due to decreases in most components of cost of sales driven by a combination of a one off impairment of property, plant and equipment of U.S.$46.7 million in connection with ULCT in the six months ended 2015, the depreciation of the Russian rouble, efficiency improvements, strong cost control and an overall decline in throughput.

Gross profit

Gross profit increased by U.S.$10.6 million, or 10.8%, from U.S.$98.1 million in the six months ended 30 June 2015 to U.S.$108.6 million in the six months ended 30 June 2016. This increase was due to the factors described above.

Administrative, selling and marketing expenses

Administrative, selling and marketing expenses decreased by U.S.$2.0 million, or 9.2%, from U.S.$21.4 million in the six months ended 30 June 2015 to U.S.$19.4 million in the six months ended 30 June 2016. This was primarily due to the decrease of U.S.$1.5 million or 11.2% in staff costs which was partially offset by U.S.$ 0.8 or 30.8% increase in legal, consulting and other professional services largely related to U.S.$350 million Eurobond issue in April 2016.

Share of (loss)/profit of joint ventures accounted for using the equity method

Share of (loss)/profit of joint ventures accounted for using the equity method decreased from a profit of U.S.$4.5 million in the six months ended 30 June 2015 to a profit of U.S.$2.2 million in the six months ended 30 June 2016. This change was primarily due to unfavourable results from VEOS.

Other gains/(losses)-net

Other gains/(losses)-net amounted to a loss of U.S.$31.3 million in the six months ended 30 June 2016 compared to a loss of U.S.$7.0 million in the six months ended 30 June 2015. This U.S.$24.3 million change was primarily due to a U.S.$24.4 million increase in currency exchange losses from U.S.$6.9 million in the six months ended 30 June 2015 to U.S.$31.3 million in the six months ended 30 June 2016 primarily as a result of hedge reserve recycle and appreciation of the Russian rouble in the six months ended 30 June 2016.

Operating profit

Operating profit decreased by U.S.$14.0 million, or 18.9%, from U.S.$74.2 million in the six months ended 30 June 2015 to U.S.$60.2 million in the six months ended 30 June 2016. This decrease was due to the factors described above.

Finance costs-net

Finance costs-net changed from a loss of U.S.$29.0 million in the six months ended 30 June 2015 to a profit of U.S.$92.6 million in the six months ended 30 June 2016. This change was primarily due to the increase in foreign exchange gain on financing activities from U.S.$6.1 million in the six months ended 30 June 2015 to U.S.$106.9 million in the six months ended 30 June 2016, resulting mostly from the revaluation of U.S. dollar denominated borrowings in the Group's subsidiaries and the positive change in the fair value of derivative instruments in the amount of US$30.2 million.

Profit/(loss) before income tax

Profit before income tax increased by U.S.$107.7 million, or 238.2%, from U.S.$45.2 million in the six months ended 30 June 2015 to U.S.$152.9 million in the six months ended 30 June 2016 due to the factors described above.

Income tax (expense)/credit

In the six months ended 30 June 2015 and 2016, income tax expense was U.S.$19.8 million and U.S.$39.4 million, respectively. The Group's effective tax rate, calculated as income tax expense divided by profit before income tax, was 43.7% and 25.8% in the six months ended 30 June 2015 and 2016, respectively. The differences in the effective tax rate from the normally applicable Russian statutory tax rate of 20% were largely driven by the effect of expenses not deductible for tax purposes, withholding tax on undistributed profits and non‑taxable results of joint ventures.

Profit/(loss) for the period

Profit for the period amounted to a profit of U.S.$113.4 million in the six months ended 30 June 2016 compared to a profit of U.S.$25.4 million in the six months ended 30 June 2015 due to the factors described above.

Liquidity and capital resources

General

As at 30 June 2016, the Group had U.S.$119.2 million in cash and cash equivalents.

The Group's liquidity needs arise primarily in connection with the repayments of principal and interest payments, and capital investment programmes of each of its operations as well as their operating costs. In the period under review, the Group's liquidity needs were met primarily by cash flows generated from operating activities as well as through borrowings. The management of the Group expects to fund its liquidity requirements in both the short and medium term with cash generated from operating activities and borrowings.

As a result of the shareholding or joint venture agreements at Moby Dik, the Finnish Ports, Yanino and VEOS, the cash generated from the operating activities of each of the entities in those businesses is not freely available to fund the other operations and capital expenditures of the Group or any other businesses within the Group and can only be lent to an entity or distributed as a dividend with the consent of the other shareholders' to those arrangements.

As at 30 June 2016, the Group had U.S.$1,151.6 million of total borrowings, of which U.S.$93.0 million comprised current borrowings and U.S.$1,058.7 million comprised non‑current borrowings. As at 30 June 2016, the Group had no undrawn borrowing facilities. See also "-Capital resources".

Cash flows

The following table sets out the principal components of the Group's consolidated cash flow statement for the six months ended 30 June 2015 and 2016.

Net cash from operating activities

Net cash from operating activities decreased by U.S.$38.3 million, or 28.6%, from U.S.$134.0 million in the six months ended 30 June 2015 to U.S.$95.7 million in the six months ended 30 June 2016. The decrease in net cash from operating activities was primarily due to a U.S.$39.1 million, or 25.5% decline in the cash generated by operations in the six months ended 30 June 2016 compared to the six months ended 30 June 2015.

Net cash used in investing activities

Net cash used in investing activities increased by U.S.$6.9 million, or 190.8%, from U.S.$3.6 million in the six months ended 30 June 2015 to U.S.$10.5 million in the six months ended 30 June 2016. The increase in net cash used in investing activities was primarily due to the fact that net cash used in investing activities in the six months ended 30 June 2015 contained proceeds from sale of property, plant and equipment of U.S.$3.4 million compared to U.S.$0.3 million in the six months ended 30 June 2016 as well as by increase in loans granted to related parties from U.S.$3.5 million in the six months ended 30 June 2015 to U.S.$7.0 million in the six months ended 30 June 2016.

Net cash used in financing activities

Net cash used in financing activities decreased by U.S.$7.1 million, or 7.8%, from U.S.$91.3 million in the six months ended 30 June 2015 to U.S.$84.2 million in the six months ended 30 June 2016. The decrease in net cash used in financing activities was primarily due to a decrease in interest paid by U.S.$2.4 million or 6.8% from U.S.$35.9 million in the six months ended 30 June 2015 to U.S.$33.5 million in the six months ended 30 June 2016 as well as a decrease in net proceeds and repayment of borrowings and finance lease principal payments by U.S$2.0 million or 3.6% from U.S.$55.3 in the six months ended 30 June 2015 to U.S.$53.3 million in the six months ended 30 June 2016.

Capital resources

The Group's financial indebtedness consists of bank borrowings, bonds, loans from related and third parties, finance leases liabilities and net derivative financial instruments and was U.S.$1,126.9 million as at 30 June 2016. As at 30 June 2016, all of the Group's bank borrowings were secured by pledges on property, plant and equipment, equity interests in certain Group members, assignments of certain contractual rights and by guarantees and suretyships granted by certain Group members. As at 30 June 2016, the Group's significant bank borrowings include an outstanding loan to VSC in the amount of U.S.$265.0 million* which will mature in 2020, outstanding loans to FCT in the amount of U.S.$34.3 million* which will mature in 2017, an outstanding loan to FCT in the amount of U.S.$225.9 million* which will mature in 2020 and outstanding loans to PLP in the amount of U.S.$6.0 million* which will mature in 2019. The Group also has a number of other smaller bank borrowings. The weighted average interest rates of the Group's debt portfolio is 6.7%, including the effects of swap arrangements. As at 30 June 2016, the Group had leverage of net debt to LTM Adjusted EBITDA ratio of 4.0* (compared to a ratio of 3.6* as at 31 December 2015).

The following table sets out the maturity profile of the Group's total borrowings (including finance leases) and net derivative financial instruments as at 30 June 2016.

As at 30 June 2016, the carrying amounts of the Group's borrowings were denominated in the following currencies:

As at 30 June 2016, the carrying amounts of a majority of the Group's borrowings denominated in Russian roubles, in the amount of U.S.$238.7 million, were swapped into U.S. dollars.

As at 30 June 2016, the Group had no undrawn borrowing facilities.

Capital expenditures

The Group's capital expenditures for the six months ended 30 June 2015 and 2016 were U.S.$4.7 million and U.S.$4.6 million, respectively, and were made primarily to purchase and renovate property, plant and equipment and in connection with maintenance expenditures and investments in safety of operations.

The Group expects capital expenditures over the next few years of between U.S.$25 million and U.S.$30 million per annum, with a focus on maintaining its current reliability, safety and quality of services.

Operating Information

The table below sets out the total gross container throughput of the Group's terminals for the periods indicated. Gross throughput is shown on a 100% basis for each terminal, including terminals held through joint ventures and accounted for using the equity method.

(1) 100% effective ownership interest, results fully consolidated for the period under review, except for FCT which is fully consolidated from 1 January 2014.

(2) 75% effective ownership interest, accounted for using the equity method.

(3) 80% effective ownership interest, results fully consolidated from 1 January 2014.

(4) Other bulk cargo handled includes coal, timber, steel, scrap metal and other types of cargo.

(5) 50% effective ownership interest in VEOS, accounted for using the equity method.

The throughput at container terminals in Russia declined by 2% in the six months ended 30 June 2016 compared to the six months ended 30 June 2015. However, the throughput of laden export containers at Russian container terminals increased by 12% in the same period, mainly due to the increased use of containers in Russia and increased exports driven by the depreciation of the Russian rouble.

The growth in containerised exports continued in the first half of 2016, with approximately 533 thousand of laden TEU exported which represents growth of 12% compared to the first half of 2015. In addition, in 2015 approximately 71 thousand TEUs of empty containers were imported into Russia to support such laden export, which also contributes to overall container throughput volumes. Approximately 72 thousand TEUs of empty containers were imported into Russia in the first half of 2016 which is almost two times more than in the first half of 2015. The import of empty containers represented 9% of total import volumes in the first half of 2016.

The growth of throughput in the Russian Baltic Basin, in the six months ended 30 June 2016 was 3% period on period. The throughput in the Russian Far Eastern Basin, where the other Group marine terminal is located, declined by 15% in the same period.

The Group's gross marine container throughput in Russia declined by 22% to 647 thousand TEU in the six months ended 30 June 2016 compared to 834 thousand TEU in the six months ended 30 June 2015. The decline in throughput was largely driven by increased competition, the decline of overall market volumes, as well as the Group's commercial strategy of prioritising pricing over volume.

The Group's car handling volumes decreased in the six months ended 30 June 2016 by 18% to 46 thousand cars, compared to 56 thousand cars in the six months ended 30 June 2015. Traditional ro ro handling increased by 3% to 7 thousand units in the six months ended 30 June 2016 from 6 thousand units in the six months ended 30 June 2015.

In order to improve the utilisation of the available space at its terminals the Group continued to focus on increasing bulk cargo volumes in its terminals in the first half of 2016. As a result, the handling of bulk cargo at marine terminals increased in the six months ended 30 June 2016 by 414 thousand tonnes, or 79%, to 939 thousand tonnes, compared to 525 thousand tonnes in the six months ended 30 June 2015.

Container cargo throughput at the Group's inland terminals increased in the six months ended 30 June 2016 by 58% period on period to 142 thousand TEU, due to ongoing containerisation in Russia and increased use of containers for exporting cargoes out of Russia.

Appendix 2: Reconciliation of Additional data (Non IFRS) to the Interim Consolidated Financial Information

Reconciliation of Adjusted EBITDA to profit for the period

Reconciliation of cost of sales adjusted for impairment to cost of sales

Reconciliation of operating cash costs to cost of sales and administrative, selling and marketing expenses

Reconciliation of operating profit adjusted for impairment to revenue

Reconciliation of profit for the period adjusted for impairment to profit for the period

Reconciliation of cash cost of sales to cost of sales

Appendix 3: Definitions and Presentation of Information

DEFINITIONS

Terms that require definitions are marked with capital letters in this announcement and the definitions of which are provided below in alphabetical order.

The non-IFRS financial measures defined below are presented as supplemental measures of the Group's operating performance, which the Group uses as key performance indicators of the Group's business and to provide a supplemental tool to assist in evaluating current business performance. The Group believes these metrics are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Russian market and global ports sector. These non-IFRS financial measures are measures of the Group's operating performance that are not required by, or prepared in accordance with, IFRS. All of these non-IFRS financial measures have limitations as analytical tools, and investors should not consider any one of them in isolation, or any combination of them together, as a substitute for analysis of the Group's operating results as reported under IFRS and should not be considered as alternatives to revenues, profit, operating profit, or any other measures of performance derived in accordance with IFRS or as alternatives to cash flow from operating activities or as measures of the Group's liquidity. In particular, the non IFRS financial measures should not be considered as measures of discretionary cash available to the Group businesses.

Adjusted EBITDA (a non-IFRS financial measure) for Global Ports Group is defined as profit for the period before income tax expense, finance (income)/costs-net, depreciation of property, plant and equipment, amortisation of intangible assets, share of profit/(loss) of joint ventures accounted for using the equity method, other gains/(losses)-net and impairment of goodwill and property, plant and equipment.

Adjusted EBITDA Margin (a non-IFRS financial measure) is calculated as Adjusted EBITDA divided by revenue, expressed as a percentage.

Average Storage Capacity is a storage capacity available at Vopak E.O.S. oil products terminals, averaged for the beginning and end of the year.

Baltic Sea Basin is the geographic region of northwest Russia, Estonia and Finland surrounding the Gulf of Finland on the eastern Baltic Sea, including St. Petersburg, Ust-Luga, Tallinn, Helsinki and Kotka.

Container Throughput in the Russian Federation Ports is defined as total container throughput of the ports located in the Russian Federation, excluding half of cabotage cargo volumes. Respective information is sourced from ASOP ("Association of Sea Commercial Ports", www.morport.com).

Cash Costs of Sales (a non-IFRS financial measure) are defined as cost of sales, adjusted for depreciation and impairment of property, plant and equipment, amortisation and impairment of intangible assets.

Cash Administrative, Selling and Marketing expenses (a non-IFRS financial measure) are defined as administrative, selling and marketing expenses, adjusted for depreciation and impairment of property, plant and equipment, amortisation and impairment of intangible assets.

CD Holding group consists of Yanino Logistics Park (an inland terminal in the vicinity of St. Petersburg), CD Holding and some other entities. The results of CD Holding group are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below Adjusted EBITDA).

Far East Basin is the geographic region of southeast Russia, surrounding the Peter the Great Gulf, including Vladivostok and the Nakhodka Gulf, including Nakhodka on the Sea of Japan.

First Container Terminal (FCT) is located in the St. Petersburg harbour, Russia's primary gateway for container cargo and is one of the first specialised container terminals to be established in the USSR. The Global Ports Group owns a 100% effective ownership interest in FCT. The results of FCT are fully consolidated.

Finnish Ports segment consists of two terminals in Finland, MLT Kotka and MLT Helsinki (in the port of Vuosaari), in each of which Container Finance currently has a 25% effective ownership interest. The results of the Finnish Ports segment are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Free Cash Flow is calculated as Net cash from operating activities less Purchase of PPE.

Functional Currency is defined as the currency of the primary economic environment in which the entity operates. The functional currency of the Company and certain other entities in the Global Ports Group is US dollars. The functional currency of the Global Ports Group's operating companies for the years under review was (a) for the Russian Ports segment, the Russian rouble, (b) for Oil Products Terminal segment, and for the Finnish Ports segment, the Euro.

Gross Container Throughput represents total container throughput of a Group's terminal or a Group's operating segment shown on a 100% basis. For the Russian Ports segment it excludes the container throughput of the Group's inland container terminals - Yanino and Logistika Terminal.

Logistika Terminal (LT) is an inland container terminal providing a comprehensive range of container freight station and dry port services at one location. The terminal is located to the side of the St. Petersburg - Moscow road, approximately 17 kilometres from FCT and operates in the Shushary industrial cluster. The Global Ports Group owns a 100% effective ownership interest in LT. The results of LT are fully consolidated.

LTM Adjusted EBITDA is calculated as Adjusted EBITDA for 2015 less Adjusted EBITDA for six months ended 30 June 2015 plus Adjusted EBITDA for six months ended 30 June 2016.

MLT Group consists of Moby Dik (a terminal in the vicinity of St. Petersburg) and Multi-Link Terminals Oy (terminal operator in Vuosaari (near Helsinki, Finland) and Kotka, Finland). The results of MLT group are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Moby Dik (MD) is located on the St. Petersburg ring road, approximately 30 kilometers from St. Petersburg, at the entry point of the St. Petersburg channel. It is the only container terminal in Kronstadt. The Global Ports Group owns a 75% effective ownership interest in MD, Container Finance LTD currently has a 25% effective ownership interest. The results of MD are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Net Debt (a non-IFRS financial measure) is defined as a sum of current borrowings and non-current borrowings, derivative financial instruments less cash and cash equivalents and bank deposits with maturity over 90 days.

Oil Products Terminal segment consists of the Group's 50% ownership interest in Vopak E.O.S. (in which Royal Vopak currently has a 50% effective ownership interest). The results of the Oil Products Terminal segment are consolidated in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Operating Cash Costs of Russian Ports (a non-IFRS measure) are defined as total Russian Ports segment's cost of sales and administrative, selling and marketing expenses, less segment's depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Operating Cash Costs of Oil Products Terminal segment (a non-IFRS measure) are defined as total Oil Products Terminalsegment's cost of sales and administrative, selling and marketing expenses, less segment's depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Operating Cash Costs of Finnish Ports (a non-IFRS measure) are defined as total Finnish Ports segment's cost of sales and administrative, selling and marketing expenses, less the segment's depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Petrolesport (PLP) is located in the St. Petersburg harbour, Russia's primary gateway for container cargo. The Group owns a 100% effective ownership interest in PLP. The results of PLP are fully consolidated.

Ro-Ro, roll on-roll off is cargo that can be driven into the belly of a ship rather than lifted aboard. Includes cars, buses, trucks and other vehicles.

Russian Ports segment consists of the Global Ports Group's interests in PLP (100%), VSC (100%), FCT (100%), ULCT (80%) (in which Eurogate currently has a 20% effective ownership interest), Moby Dik (75%), Yanino (75%) (in each of Moby Dik and Yanino Container Finance currently has a 25% effective ownership interest), and Logistika Terminal (100%). The results of Moby Dik and Yanino are accounted in the Global Ports' consolidated financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

TEU is defined as twenty-foot equivalent unit, which is the standard container used worldwide as the uniform measure of container capacity; a TEU is 20 feet (6.06 metres) long and eight feet (2.44 metres) wide and tall.

Total Operating Cash Costs (a non-IFRS financial measure) is defined as Global Ports Group's cost of sales, administrative, selling and marketing expenses, less depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Ust Luga Container Terminal (ULCT) is located in the large multi-purpose Ust-Luga port cluster on the Baltic Sea, approximately 100 kilometres westwards from St. Petersburg city ring road. ULCT began operations in December 2011. The Global Ports Group owns an 80% effective ownership interest in ULCT, Eurogate, the international container terminal operator, currently has a 20% effective ownership interest. The results of ULCT are fully consolidated.

Vopak E.O.S. includes AS V.E.O.S. and various other entities (including an intermediate holding) that own and manage an oil products terminal in Muuga port near Tallinn, Estonia. The Group owns a 50% effective ownership interest in Vopak E.O.S.. The remaining 50% ownership interest is held by Royal Vopak. The results of Vopak E.O.S. are accunted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Vostochnaya Stevedoring Company (VSC) is located in the deep-water port of Vostochny near Nakhodka on the Russian Pacific coast, approximately eight kilometers from the Nakhodka-Vostochnaya railway station, which is connected to the Trans-Siberian Railway. The Group owns a 100% effective ownership interest in VSC. The results of VSC are fully consolidated.

Weighted average effective interest rate is the average of interest rates weighted by the share of each loan in the total debt portfolio.

Yanino Logistics Park (YLP) is the first terminal in the Group's inland terminal business and is one of only a few multi-purpose container logistics complexes in Russia providing a comprehensive range of container and logistics services at one location. It is located approximately 70 kilometres from the Moby Dik terminal in Kronstadt and approximately 50 kilometres from PLP. The Global Ports Group owns a 75% effective ownership interest in YLP, Container Finance LTD currently has a 25% effective ownership interest. The results of YLP are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Appendix 4: Investor Presentation

An investor presentation is available at www.globalports.com.

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