Last checked at 29 Dec 2010 08:00
Press Release
NCSP Group Consolidated Financial Results for Nine Months 2010
29 December 2010
Novorossiysk Commercial Sea Port (LSE: NCSP, RTS and MICEX: NMTP) announces interim condensed consolidated financial results (unaudited) for the nine months ended 30 September 2010 in accordance with International Financial Reporting Standards (IFRS).
The full text of interim condensed consolidated financial statements (unaudited) for the nine months ended 30 September 2010 of the NCSP Group are available on the Group's website at: http://nmtp.info/en/holding/investors/reporting/msfo/
Key financial indicators of the Group (USD '000)
9 months 2010 | 9 months 2010 | Change % | |
Revenue | 499 372 | 508 238 | (1.7%) |
Gross Profit | 321 112 | 338 615 | (5.2%) |
EBITDA Adjusted** | 362 145 | 353 959 | 2.3% |
Operating Profit | 292 848 | 299 520 | (2.2%) |
Net Finance Costs*** | (3 748) | (16 166) | (76.8%) |
Net Profit | 232 986 | 208 084 | 12.0% |
Net Profit Adjusted* | 235 564 | 225 990 | 4.2% |
Earnings per share, basic and diluted, USD | 1.17 | 1.06 | 10.4% |
Investments* (including maintenance CAPEX and VAT) | 80 557 | 55 434 | 45.3% |
Net debt* | 19 286 | 196 146 | - |
Cargo turnover* (thousand tons) | 62 671.4 | 65 218.8 | (3.9%) |
*The amount is either a non-IFRS measure or according to management reporting data
** Calculated as Profit Before Income Tax increased by Depreciation and Amortization expense, Finance Costs, and Foreign Exchange Loss (Gain).
*** Calculated as Interest Income on Deposits minus Finance Costs.
Revenue
NCSP Group consolidated revenue for nine months of 2010 amounted to $499 372 thousand versus $508 238 for the same period last year.
Thousand USD | 9 months 2010 | 9 months 2009 | Change, % |
Total, including: | 499 372 | 508 238 | (1.7%) |
Stevedoring services | 391 600 | 399 100 | (1.9%) |
Additional port services | 63 612 | 66 879 | (4.9%) |
Fleet services | 34 491 | 35 662 | (3.2%) |
Ship repair services | 1 488 | 445 | - |
Other | 8 181 | 6 192 | 32.1% |
Revenue from stevedoring services (transshipment of liquid, bulk, general and container cargo, including bunkering) for 9 months of 2010 reduced by 1.7% as a result of the 3.9% reduction of NCSP Group cargo traffic. Whereas only the grain export ban effective from 15 August 2010 resulted in unearned revenues of $7 045* thousand. On the other hand, it is worth mentioning that revenues from handling of containers in the reporting period increased by 59.5%, revenues from timber cargo loading increased by 36.9%, revenues from loading of bulk mineral fertilizers - by 43.5%, and revenues from handling of non-ferrous metals grew by 28.8%.
Revenues from Additional Port Services (forwarding, storage, customs documentation, repacking, etc) and Fleet Services for the 9 months of 2010 decreased by 4.9% and 3.2% respectively, influenced by changes in the cargo turnover.
Revenue from Ship Repair Services in the first three quarters of 2010 has more than tripled compared to that of the same period last year and totaled $1 488 thousand as a results of completing more ship-repair orders for external clients.
Revenue from Other Services in the reporting period increased by 32.1% mostly thanks to implementing the project for tugboat fleet expansion and providing tug-and-towing services in new markets.
Cost of Services and SG&A
NCSP Group cost of services under IFRS totaled $178 260 thousand for the nine months of 2010 versus $169 623 thousand for the same period of 2009.
Key factors affecting Group's cost of services in the first three quarters of 2010 versus same period of 2009 were:
- Depreciation charge increase as a result of commissioning of new equipment added $4 324* thousand to the Cost of Services;
- Appreciation of the Russian ruble against the representation currency (US dollar) during nine months of 2010 as compared to nine months of 2009 caused the Cost of Services to grow in dollar terms by $8 560* thousand;
- Reduction of pension liabilities according to new actuarial calculations and changes in provisions for probable economic outflows allowed to offset the growth in other cost items (including power and utility costs, and repair and maintenance expenses) and reduced the total Cost of Services by $4 247* thousand.
Selling, general, and administrative expenses of NCSP Group in the reporting period totaled $28 086 thousand versus $38 931 thousand in the same period of 2009. SG&A reduction was mostly conditioned by reversal of earlier accrued reserves connected with advance payments in the course of the investment program implementation ($8 456 thousand) and changes in provisions for probable economic outflows ($2 710 thousand).
EBITDA Adjusted
In order to provide comparability of the data for 9 months of 2010 and 9 months of 2009, the calculation of EBITDA* for both periods was adjusted for foreign exchange loss (gain) on assets and liabilities nominated in foreign currency, which have been caused by the fluctuations of the ruble-dollar exchange rates. EBITDA Adjusted*** for the 9 months of 2010 amounted to $362 145* thousand versus $353 959* thousand for the same period last year.
These are the key factors affecting Group's EBITDA Adjusted change in the reporting period:
- Increase of interest income on deposits increased EBITDA Adjusted by $8 440* thousand;
- Group's cost optimization efforts and foreign exchange loss (gain) brought EBITDA Adjusted up by $6 235* thousand;
- Decline of cargo turnover and changes in the cargo mix reduced EBITDA Adjusted by $4 241* thousand;
- Reduction of additional port services decreased EBITDA Adjusted by another $2 156* thousand.
Net Profit Adjusted
In order to provide comparability of the data for 9 months of 2010 and 9 months of 2009, the calculation of the net profit for both periods has to be adjusted for foreign exchange gains/losses and their effect on the profit tax. Taking into account the above, Adjusted Net Profit in the reporting period totaled $235 564* thousand versus $225 990* thousand for the same period of 2009.
Growth of Net Profit Adjusted was conditioned by:
- Increase of interest income on deposits from $8 038 thousand in 9 months of 2009 up to $16 478 thousand in the same period of 2010;
- Reversal of earlier accrued reserves connected with advance payments in the course of the investment program implementation, and changes in provisions for probable economic outflows;
- Reduction of Finance costs following the repayment of the $118 million syndicated loan facility on 17 July 2010.
Credit burden and net debt
NCSP Group indebtedness totaled $327 017 thousand as of 30 September 2010, of which the current portion of long-term debt due within 12 months from the reporting date comprised $28 488. Massive reduction of the Group's credit burden and the current portion of debt resulted from repayment of the $118 million syndicated loan facility on 17 July 2010.
As of reporting date NCSP Group net debt comprised $19 286 thousand, taking into account the Groups cash resources in the amount of $307 731 thousand, as follows:
- Cash and cash equivalents in the amount of $58 635 thousand;
- Deposits maturing in more than 3 but less than 12 months in the amount of $249 096 thousand.
As at 30 September 2010, the average effective borrowing rate according to IFRS was 7.19% per annum versus 6.67% per annum as at 31 December 2009. This growth was conditioned by the repayment of the $118 million syndicated loan facility (with 4.8% annual interest rate).
The Group's borrowings as of 30 September 2010 are repayable as follows:
in thousand USD | Capital element | Contractual interest liability |
Total, of which: | 327 017 | 43 795 |
Due within three months | 7 834 | 11 107 |
Due from three to six months | 1 511 | 509 |
Due from six to 12 months | 19 143 | 11 121 |
Exceeding 1 year | 298 529 | 21 058 |
Investment Program Implementation
In the reporting period NCSP Group continued to implement its investment program aimed at construction of new, and expansion of existing stevedoring facilities.
According to management accounts, in the first nine months of 2010 investments totaled $80 557* thousand versus $55 434* thousand in the same period of 2009, including:
- Maintenance CAPEX of $22 968* thousand in 9M 2010 versus $19 802 thousand in 9M 2009;
- Investment in construction of new stevedoring capacity comprised $57 589* thousand for 9M2010 versus $35 632* thousand for 9M 2009.
About NCSP Group
Novorossiysk Commercial Sea Port is the largest Russian port operator in terms of cargo turnover. Group's consolidated cargo turnover in 2009 totaled 86.5 million tons. Consolidated revenue to IFRS in 2009 totaled $675.1 million and net profit $252.2 million. NCSP shares are traded on Russia's RTS and MICEX exchanges (NMTP) and on the London Stock Exchange (NCSP) in the form of GDRs (1 GDR representing 75 shares). NCSP Group includes the following stevedore companies: PJSC NCSP, PJSC Novorossiysk Grain Terminal, OJSC Novorossiysk Shipyard, PJSC NCSP Fleet, OJSC Novoroslesexport, OJSC IPP, and Baltic Stevedoring Company Ltd.
For more information please contact: Tel.: +7 (495) 783-5434; IR@nmtp.info