GLPR.L Regulatory News (GLPR)

For immediate release 29 April 2016

Global Ports Investments PLC

Publication of 2015 Annual Report and Accounts

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 publishes its 2015 Annual Report and Accounts ("the Annual Report for 2015").

The Group's Full Year 2015 Financial Results are included as an Appendix to the Annual Report for 2015. The Annual Report for 2015 is available for viewing or downloading in pdf format at:

http://www.globalports.com/globalports/upload_docs/reports/Global_Ports_Annual_Report_2015.pdf

or here:

http://www.rns-pdf.londonstockexchange.com/rns/8202W_-2016-4-29.pdf

The Annual Report for 2015 will also be available in hard copy at the registered office of the Company at Omirou 20, Agios Nikolaos, CY-3095 Limassol, Cyprus, and a copy will be submitted to the National Storage Mechanism, available for inspection at http://www.morningstar.co.uk/uk/NSM.

In compliance with DTR 6.3.5, the following information is extracted from the Annual Report for 2015 and should be read in conjunction with the Group's Full Year 2015 Financial Results Announcement issued on 11 March 2016. Together, these constitute the material required by DTR 6.3.5 to be communicated to the media in full-unedited text through a Regulatory Information Service. This material is not a substitute for reading the Annual Report for 2015 and page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the Annual Report for 2015.

Principal risks and uncertainties

The following description of principal risks and uncertainties is extracted from the "Risk Management" section of the Annual Report for 2015, pages 34 - 35 of the Annual Report for 2015.

Global Ports' risk management process is focused on mitigating or, to the extent possible, eliminating the potential negative impact on the business caused by changes in the external and internal business, financial, regulatory and operating environment. The Group's risk management activity is based on a series of well defined risk management principles, derived from experience, best practice and corporate governance principles. The Group updates and improves its risk management system regularly.

The Board has established risk management rules and procedures for identifying risks at an early stage, and taking proactive steps to assess, monitor and manage the risks inherent to any commercial activity. The Board systematically monitors and conducts assessment of the risks critical to the Group's performance and delivery of its strategy. After identifying and assessing a risk, the Group defines control measures aimed at reducing the likelihood of its occurrence and/or the potential impact.

The Board delegates to the CEO responsibility for the effective and efficient implementation and maintenance of the risk management system. The Audit and Risk Committee of the Board is in charge of the routine oversight of risk management and review of the effectiveness of the systems that have been established for this purpose.

The Group's business involves a number of risks, the most notable of which are listed below. The order in which the risks are presented is not intended to be an indication of the probability of their occurrence or the magnitude of their potential effects. Additional risks that are not known to the Group or recognised as risks at this time, or that it currently believes are immaterial, could also have a material adverse effect on the Group's business, financial position, results of operations or future prospects and the trading price of the GDRs.

For more detail on some of the risks detailed here, see the notes to the financial statements, attached to the Annual Report for 2015.

For more detail on some of the risks detailed here, see the Global Ports (Finance) PLC Listing Particulars dated 14 April 2016 ("Risk Factors", pages 10-33), available for viewing on the website of the Irish Stock Exchange at http://www.ise.ie/debt_documents/ListingParticulars_d398ae87-1b1e-4a59-8301-6c0946d06dbc.PDF and the notes to the financial statements, attached to the Annual Report for 2015.

Strategic risks

- The Group is dependent on trade volumes, in particular container volumes, and, accordingly, on the strength of the economy in Russia. The country's container market throughput has historically demonstrated a very strong correlation with the volume of imports of goods into Russia, which in turn is driven by domestic consumer demand. The Group has and may continue to be subject to significant container market deterioration as economic growth and consumer demand in Russia deteriorate;

- The Group may be subject to increasing competition from other container and oil product terminals. The introduction of significant new capacity by or consolidation between the Group's existing competitors and new market entrants could result in surplus capacity and subject the Group to intensified price competition, lower utilisation and a potential reduction of profitability. In a market contraction environment, commercial policies and approaches of the Group's competitors may be irrational, and this may lead to significant price competition. The Group's competitors are increasingly experienced and professional, enabling them to compete more effectively, and some may have greater resources or different capacities or approaches than the Group that could enable them to accommodate customers more effectively. Development of alternative logistics solutions, such as rail delivery of containers from the point of origin to the point of destination, could also in the future present a competition threat to the Group;

- Further consolidation or alliances among container shipping companies could enable the Group's customers to exercise greater bargaining power when negotiating with the Group;

- The Group's ability to maintain or increase throughput volumes depends on the ongoing improvement, development and maintenance of railway and road infrastructure at or connected to its terminals, and the ability of private and state-controlled rail and truck operators to arrange inbound and outbound transportation of sufficient cargo flows;

- Russia's physical infrastructure is in poor condition, which could disrupt or impair the Group's normal business activity, and any efforts by the Russian government to improve such infrastructure may increase the Group's costs;

- The Group's ability to discover, evaluate and select among alternatives to allocate financial and human resources for the effective development and execution of strategic plans to achieve its strategic objectives;

- Instability in the Russian economy and exposure to social and political factors could create an uncertain operating environment and affect the Group's ability to sell its services due to significant economic, political, legal and legislative risks;

- Certain government policies or the selective and arbitrary enforcement of such policies could make it more difficult for the Group to compete effectively or impact its profitability;

- The political instability in Ukraine, heightened levels of tension between Russia and other states, increased military activity on the border between Russia and Ukraine and the imposition by the United States, the European Union and other countries of sanctions, asset freezes, travel limitations and certain other restrictive measures against specified Ukrainian and Russian individuals and legal entities, including a number of Russian banks, and the imposition by Russia of sanctions, including import and travel restrictions, has had in the past, and may continue to have in the future, an adverse effect on the Russian economy and demand for commodities. Such factors also could adversely affect the Group's ability to obtain financing on favourable terms and to deal with certain persons and entities in Russia or in other countries; and

- The Group's operations depend on the dredging and maintenance of quay drafts, which are governed by port and other governmental authorities and are outside of the Group's control.

Operational risks

- The Group is dependent on a limited number of shipping lines and customers for a significant portion of its business;

- The Group is subject to a wide variety of regulations, standards and requirements and may face substantial liability if it fails to comply with existing or future regulations applicable to its businesses;

- The Group leases a significant amount of the land and quays required to operate its terminals from government agencies and any revision or alteration of the terms of these leases or the termination of these leases, or changes to the underlying property rights under these leases, could adversely affect the Group's business;

- The Group is dependent on the performance of services by third parties outside its control, including the performance by all other participants in the logistics chain, such as customs inspectors (delays in customs inspections could materially affect the flow of trade at the Group's terminals), supervisory authorities and others, and the performance of security procedures carried out at other port facilities and by its shipping line customers;

- Changes in costs in any part of the logistics chain in which the Group operates could affect the Group's competitive position;

- Inflation could increase the Group's cost base and the Group may be adversely affected by wage increases in Russia;

- The Group's oil products business could be affected by changes in Russia's exports of oil products and handling of such exports at its oil products terminal in Estonia, a decline in global demand for oil products or in Russian oil product export volumes or any change in trade relationships with Estonia;

- Tariffs for certain services at certain of the Group's terminals were regulated in the past by the Russian federal government and tariffs charged for services were subject to a maximum tariff rate. The Russian federal government may reintroduce such tariff regulation or new tariff regulation and the Group might need to obtain permission from the regulatory authorities to increase the maximum tariff rate. The Russian federal government may also set any maximum allowed tariffs in Russian roubles;

- The Group's insurance policies may be insufficient to cover certain losses;

- The Group's competitive position and prospects depend on the expertise and experience of its key managers and its ability to continue to attract, retain and motivate qualified personnel;

- Failure of the operational information and technology systems at the Group's terminals could result in disruptions to the services it provides;

- Accidents involving the handling of hazardous materials and oil products at the Group's terminals could disrupt its business and operations and/or subject the Group to environmental and other liabilities;

- The risk of safety incidents is inherent in the Group's businesses; and

- The Group's operations could be adversely affected by terrorist attacks, natural disasters or other catastrophic events beyond its control.

Compliance and shareholder risks

- The Group's controlling beneficial shareholders may have interests that conflict with those of the holders of the GDRs;

- The Group is exposed to risks in connection with its interests in joint venture and strategic partnership businesses;

- Adverse determination of pending and potential legal actions involving the Group's subsidiaries could have an adverse effect on the Group's business, revenues and cash flows and the price of the GDRs;

- Weaknesses relating to the Russian legal system and Russian law create an uncertain environment for investment and business activity and Russian legislation may not adequately protect against expropriation and nationalisation; and

- The lack of independence of certain members of the judiciary, the difficulty of enforcing court decisions and governmental discretion in instigating, joining and enforcing claims could prevent the Group from obtaining effective redress in court proceedings.

Financial risks

- The Group is a holding company and its ability to pay dividends or meet costs depends on the receipt of funds from its subsidiaries;

- The Group is subject to foreign-exchange risk arising from various currency exposure, primarily the Russian rouble and the US dollar. Foreign-exchange risk is the risk to profits and cash flows of the Group arising from movement of foreign-exchange rates due to inability to appropriately plan for and react to fluctuations in foreign-exchange rates. Risk arises from revaluation of assets and liabilities (mainly debt) denominated in foreign currency;

- The Group is subject to interest-rate risk due to floating rate liabilities in relation to its leases and long-term borrowings. Increases in interest rates may adversely affect the Group's financial condition;

- The Group may be subject to credit risk due to its dependence on key customers and suppliers;

- The Group's indebtedness or the enforcement of certain provisions of its financing arrangements could affect its business or growth prospects; and

- The Group has high leverage and a substantial amount of its borrowings are secured and subject to covenants, which could be breached.

General business risks

- The Group's inability to maintain and monitor labour relations with labour unions; and

- Failure of information systems to adequately protect critical data and infrastructure from theft, corruption and unauthorised usage.

Directors Responsibility Statements

Each of the Directors confirms to the best of his or her knowledge that:

(a) the consolidated and parent company financial statements and report of the Board of Directors (included in the Annual Report for 2015) have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of the Cyprus Companies Law, Cap. 113, and give a true and fair view of the financial position, financial performance and cash flows of the Company and the undertakings included in the consolidation taken as a whole; and

(b) the Strategic Report (included in the Annual Report for 2015) includes a fair review of the development and performance of the business and the position of Global Ports Investments PLC and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

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

Global Ports Investments PLC is the leading operator of container terminals in the Russian market as measured by container throughput.

Global Ports' terminals are located in the Baltic and Far East Basins, key regions for foreign trade cargo flows. Global Ports operates or has joint venture interests in five container terminals in Russia (Petrolesport, First Container Terminal, Ust-Luga Container Terminal[1] and Moby Dik[2] in the Russian Baltics, and Vostochnaya Stevedoring Company in the Russian Far East) and two container terminals in Finland[3] (Multi-Link Terminals Helsinki and Multi-Link Terminals Kotka). Global Ports also owns or has joint venture interests in inland container terminals Yanino Logistics Park[4] 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.[5] in Estonia.

Global Ports' consolidated revenue for 2015 was USD 405.7 million and Adjusted EBITDA was USD 291.0 million*. The total marine container throughput was 1,834 thousand TEU* in 2015.

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.