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12 Nov 2008 15:59
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For Immediate Release 12Β NovemberΒ 2008
GlobaltransΒ issues anΒ update onΒ recentΒ developments andΒ announces keyΒ initiatives taken inΒ response toΒ the current economic environment
Globaltrans InvestmentΒ PLCΒ ("Globaltrans" or together with its consolidated subsidiaries the "Group"),Β Russia's largest privately owned freight rail operatorΒ todayΒ issuesΒ an update onΒ recentΒ developments andΒ outlines theΒ initiatives thatΒ managementΒ is takingΒ inΒ view ofΒ theΒ current economic environment.
The strong performance reported at the end ofΒ theΒ first half of 2008 continued in the third quarter.Β Effective fromΒ theΒ start of theΒ fourth quarter of 2008,Β developments in theΒ globalΒ economicΒ environmentΒ haveΒ resulted inΒ a drop inΒ outputΒ levels in the metals and miningΒ and constructionΒ industriesΒ ofΒ Russia. Whereas internal demand for steelΒ hasΒ remained intact,Β the export volumes of metals haveΒ contracted.Β As a result, demand for freight transportation servicesΒ inΒ certainΒ segmentsΒ has slowed in recent weeks.
According to preliminary estimates,Β Globaltrans'Β freight rail turnoverΒ in October 2008Β decreasedΒ byΒ aboutΒ 9% in comparison withΒ OctoberΒ ofΒ theΒ previous year,Β driven mostly byΒ theΒ currentΒ decrease in demand from metals and mining,Β along withΒ relativelyΒ steady demandΒ from oil and oil products and coal sectors.Β
To minimise the effect on Globaltrans of the current slowdown in metals and mining,Β management is proactively exploiting theΒ flexibility ofΒ itsΒ gondola railcar fleet, which allows rapid adjustment to sector developments,Β with a view toΒ increasing Globaltrans' presence in coal, timber and other transportation sectors in which it is not yet active.Β In addition,Β Group management is focusing on operational efficiency to secure cost leadership in the industry.
Globaltrans'Β management is closely monitoringΒ theΒ current downwardΒ trendΒ in the priceΒ of railcarsΒ and is considering delaying its discretionary CAPEX planΒ forΒ theΒ current yearΒ to benefit from theΒ expected futureΒ lower railcar prices.Β
GlobaltransΒ remains committed toΒ itsΒ strategy ofΒ growthΒ through rolling stock fleet expansion.Β Β The growth tactics will, however, be refocused, with the Group concentrating on further diversifying operations through value-creating acquisition opportunities.Β TheΒ GroupΒ is looking closely at a number of potential targets to strengthenΒ itsΒ franchise in the oil and oil products sector as well as broaden its regional coverage.
GlobaltransΒ managementΒ sees,Β notwithstandingΒ theΒ current temporary slowdown,Β solid growth prospects for theΒ freight rail transportationΒ industry and expects to capitaliseΒ onΒ Group'sΒ strong financial position to further diversify, continue sustainable growthΒ and buildΒ itsΒ market share.
ENQUIRIES
Globaltrans Investor Relations +357 25 503 153
Priit Pedaja
Mikhail Perestyuk
Citigate Dewe Rogerson +44 20 7638 9571
David Westover
Agnes Riousse
NOTES TO EDITORS
Globaltrans isΒ Russia's largest privately owned freight rail operator by number of rolling stock operated. Globaltrans providesΒ freightΒ railΒ transport and logistics servicesΒ toΒ over 25,000 destinations covering every major industrial region inΒ RussiaΒ and part ofΒ theΒ Ukraine. Globaltrans' regional network encompasses 10 branch offices. Globaltrans'Β keyΒ customers are large industrial blue chipΒ companiesΒ fromΒ theΒ keyΒ sectors of the Russian economy.
Globaltrans is the only public company in the Russian railway sector. In May 2008, Globaltrans was listed onΒ theΒ London Stock Exchange (LSE) with a free-float of c. 30%. For more information on the company, please visit the website:Β .
LEGAL DISCLAIMER
Some of the information in this documentΒ may contain projections or other forward-looking statements regarding future events or the future financial performance of Globaltrans. You can identify forward-looking statements by terms such as expect, believe, anticipate, estimate, intend, will, could, may or mightΒ andΒ the negative of such terms or other similar expressions. Globaltrans wishes to caution you that these statements are only predictions and that actual events or results may differ materially.Β Globaltrans 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 Globaltrans, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industriesΒ in whichΒ Globaltrans operates, as well as many other risks specifically related to Globaltrans and its operations.
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