Last checked at 12 Nov 2008 17:39
This announcement replaces the previous announcement RNS number 0387I and now includes footnote 1
For Immediate Release 12 November 2008
Globaltrans issues an update on recent developments and announces key initiatives taken in response to the current economic environment
Globaltrans Investment PLC ("Globaltrans" or together with its consolidated subsidiaries the "Group"), Russia's largest privately owned freight rail operator today issues an update on recent developments and outlines the initiatives that management is taking in view of the current economic environment.
The strong performance reported at the end of the first half of 2008 continued in the third quarter. Effective from the start of the fourth quarter of 2008, developments in the global economic environment have resulted in a drop in output levels in the metals and mining and construction industries of Russia. Whereas internal demand for steel has remained intact, the export volumes of metals have contracted. As a result, demand for freight transportation services in certain segments has slowed in recent weeks.
According to preliminary estimates, Globaltrans' freight rail turnover1 in October 2008 decreased by about 9% in comparison with October of the previous year, driven mostly by the current decrease in demand from metals and mining, along with relatively steady demand from oil and oil products and coal sectors.
To minimise the effect on Globaltrans of the current slowdown in metals and mining, management is proactively exploiting the flexibility of its gondola railcar fleet, which allows rapid adjustment to sector developments, with a view to increasing Globaltrans' presence in coal, timber and other transportation sectors in which it is not yet active. In addition, Group management is focusing on operational efficiency to secure cost leadership in the industry.
Globaltrans' management is closely monitoring the current downward trend in the price of railcars and is considering delaying its discretionary CAPEX plan for the current year to benefit from the expected future lower railcar prices.
Globaltrans remains committed to its strategy of growth through rolling stock fleet expansion. The growth tactics will, however, be refocused, with the Group concentrating on further diversifying operations through value-creating acquisition opportunities. The Group is looking closely at a number of potential targets to strengthen its franchise in the oil and oil products sector as well as broaden its regional coverage.
Globaltrans management sees, notwithstanding the current temporary slowdown, solid growth prospects for the freight rail transportation industry and expects to capitalise on Group's strong financial position to further diversify, continue sustainable growth and build its 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
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1 Freight rail turnover calculated as tonnage of freight carried multiplied by distance carried, measured in tonne-kilometres.
NOTES TO EDITORS
Globaltrans is Russia's largest privately owned freight rail operator by number of rolling stock operated. Globaltrans provides freight rail transport and logistics services to over 25,000 destinations covering every major industrial region in Russia and part of the Ukraine. Globaltrans' regional network encompasses 10 branch offices. Globaltrans' key customers are large industrial blue chip companies from the key sectors of the Russian economy.
Globaltrans is the only public company in the Russian railway sector. In May 2008, Globaltrans was listed on the London Stock Exchange (LSE) with a free-float of c. 30%. For more information on the company, please visit the website: www.globaltrans.com.
LEGAL DISCLAIMER
Some of the information in this document 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 might and 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. 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 industries in which Globaltrans operates, as well as many other risks specifically related to Globaltrans and its operations.