Last checked at 20 Apr 2011 07:42
NCSP Group financial results to IFRS for 2010
April 20, 2011
Novorossiysk Commercial Sea Port (LSE: NCSP, RTS and MICEX: NMTP) hereby announces audited consolidated financial results for year ended 31 December 2010 in accordance with International Financial Reporting Standards (IFRS). In the reporting period NCSP Group has increased its net profit by 2.5% versus that of 2009 reaching $ 258 440 thousand.
The complete NCSP Group's audited consolidated financial statements for year ended 31 December 2010 are available on the Group's website under Investor Relations at: http://nmtp.info/en/holding/investors/reporting/msfo/
Commenting on the company's financial results for 2010, Chief Executive Officer Igor Vilinov said: «Last year the company operated in a very difficult, rapidly changing market. Due to the government ban on export of grain, we missed substantial volume of one of our most profitable cargos. Nonetheless, even in these conditions NCSP Group managed to increase its net profit. This is the best confirmation that a diversified cargo base is the cornerstone of stability and the launchpad for further growth of our business».
Key financial indicators of NCSP Group (USD '000)
2010 | 2009 | Change % | |
Revenue | 635 315 | 675 060 | -5.9% |
Cost of sales | (242 069) | (236 813) | 2.2% |
Gross Profit | 393 246 | 438 247 | -10.3% |
Adjusted EBITDA ** | 415 975 | 431 015 | -3.5% |
Operating Profit | 346 472 | 367 926 | -5.8% |
Net Finance Costs*** | 11 769 | 20 499 | -42.6% |
Net Profit | 258 440 | 252 165 | 2.5% |
Earnings per share, basic and diluted, USD | 0.0131 | 0.0130 | - |
Investments* (including maintenance CAPEX and VAT) | 129 707 | 72 854 | 78.1% |
Cargo turnover* (thousand tons) | 81 602.8 | 86 519.4 | -5.7% |
* Here and below, based on management accounts data
** Calculated as profit before tax, increased by the amount of depreciation charges, net financial costs and exchange rate differences
*** Calculated as the difference between interest income on deposits and financial costs
Revenue
NCSP Group's consolidated revenue totaled $635 315 in 2010 compared to that of $675 060 in 2009.
'000 USD | 2010 | 2009 | Change, % |
TOTAL, of which: | 635 315 | 675 060 | -5,9% |
Stevedoring services | 494 804 | 534 168 | -7,4% |
Additional port services | 81 213 | 84 663 | -4,1% |
Fleet services | 45 028 | 46 874 | -3,9% |
Ship repair | 2 254 | 915 | - |
Other | 12 016 | 8 440 | 42,4% |
The main factor that had a positive impact on revenue from stevedoring services (including cargo transshipment and bunkering services) in the reporting period was growth of Group's cargo turnover in a number of key categories: container cargo by 100.8%; nonferrous metals by 28.8%; mineral fertilizers by 23%; and timber cargo by 14.3%. Revenue from these cargoes grew by $23 548* thousand, including by $14 271* thousand from container cargo, $3 050* thousand from nonferrous metals, $2 936* thousand from mineral fertilizers, and $3 289* thousand from timber cargo.
On the other hand, revenue was negatively affected by a decline of volumes in 2010 versus 2009 for a range of cargoes (grain, iron ore, ferrous metals, and liquid cargo), which caused corresponding revenues to decrease by $ 63 291* thousand. Major portion of this - $39 995* thousand - accounts for losses suffered from the ban on grain exports that the Russian government imposed on August 15, 2010.
Thanks to operative management of cargo traffic, the management of NCSP Group was able to compensate for the decline of stevedoring revenue from all types of cargoes except grain, the volume of which fell due to non-market, external factors.
Group revenue from stevedoring services in 2010 comprised $ 494 804 thousand which is by $39 364 thousand less that that 2009.
Revenue from additional port services (storage, forwarding, repacking, customs documentation processing, etc.) and fleet services in 2010 declined by respectively $3 450 thousand and $1 846 thousand in line with changes in the cargo turnover.
Revenue from ship repair services, however, more than doubled in 2010 on the back of growth in the number of third-party repair contracts.
Revenue from other services surged by $3 576 thousand in 2010 on the back of new revenue from leasing of fixed assets that the Group has commissioned.
Cost of Services and SG&A
NCSP Group's cost of services totaled $242 069 thousand in the reporting period compared to $236 813 in 2009. The main factors affecting the Group's cost of services in 2010 compared to 2009 included:
- growth of depreciation charges resulting from commissioning new equipment in operation increased cost of services by $4 369 thousand;
- strengthening of the ruble versus the presentation currency (US dollar) in 2010 compared to 2009, which increased the cost of services in dollar terms by $7 278* thousand;
- a reduction of pension obligations under updated actuarial calculations, enabled the Group to offset growth of some other costs resulting in final reduction of the cost of services by $6 391* thousand.
Selling, general and administrative expenses of NCSP Group totaled $ 46 643 thousand in 2010 compared to $68 232 thousand in 2009. These expenses were reduced primarily by recovering provisions for advance payments on the investment program in the amount of $16 912* thousand, and recovering provisions for future expenses in the amount of $ 5 170* thousand.
Adjusted EBITDA
In order to ensure comparability of data for 2010 and 2009, EBITDA for both periods is adjusted for exchange rate differences, resulting from fluctuations in the Russian ruble's exchange rate against the US dollar, on Group assets and liabilities nominated in foreign currency. Adjusted EBITDA amounted to $415 975* thousand in 2010 compared to $431 015* in 2009.
Changes in Adjusted EBITDA was affected by the following factors:
- the decline in cargo turnover, primarily due to the export ban on grain, reduced EBITDA by $24 458* thousand;
- in line with the decline in cargo turnover, EBITDA from additional port services declined by $2 277* thousand;
- optimization of operating expenses and exchange rate differences offset the decline in EBITDA by $11 696* thousand.
Leverage and net debt
NCSP Group debt on loans and other borrowing totaled $321 312 thousand as of December 31, 2010, with the current portion of long-term debt due within 12 months after the reporting date amounting to $15 900 thousand. The total debt and current debt decreased substantially thanks to the repayment of a syndicated loan of $118 million on July 15, 2010.
NCSP Group's net debt amounted to $9 972 as of the reporting date, which includes monetary resources at the Group's disposal, as follows:
- cash and cash equivalents of $265 017 thousand;
- deposits maturing in more than three months but less than 12 months totaling $46 323 thousand.
The average effective interest rate on loans and other borrowing was 6.84% to IFRS as of December 31, 2010 compared to 6.67% as of December 31, 2009.
NCSP Group loans and other borrowing as of December 31, 2010 are due to be repaid as follows:
'000 USD | Principal debt | Interest |
TOTAL, of which: | 321 312 | 32 781 |
Due within three months | 3 333 | 222 |
Due in three to six months | 5 900 | 10 638 |
Due in six to twelve months | 6 667 | 11 040 |
Due in more than one year | 305 412 | 10 881 |
Investment program
NCSP Group in 2010 virtually doubled capital expenditures to $129 707* thousand from $72 854* in 2009. This included:
- $96 489* thousand invested in construction of new terminals, compared to $47 899* thousand in 2009;
- $33 218* thousand invested in current operations (modernization of plant and equipment), compared to $24 955* thousand in 2009.
Events after the balance sheet date
NCSP Group on January 21, 2011 acquired 100% of PTP Ltd. from Omirico Limited for $2.153 billion in cash. To finance the acquisition the Group received a loan of $1.95 billion from Sberbank of Russia.
About NCSP Group
Novorossiysk Commercial Sea Port is the largest Russian port operator and the 3d operator in Europe in terms of cargo turnover. 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 consolidated cargo turnover in 2009 totaled 86.5 million tons (excluding Primorsk Trade Port), andc onsolidated revenue to IFRS for 9 months of 2010 totaled $499.4 million and net profit $233.0 million. NCSP Group includes the following stevedore companies: PJSC Novorossiysk Commercial Sea Port, PJSC Primorsk Trade Port (since 2011), PJSC Novorossiysk Grain Terminal, OJSC Novorossiysk Shipyard, PJSC Fleet of NCSP, OJSC NLE, OJSC IPP, and Baltic Stevedoring Company Ltd.
For more information please contact:
+7 (8617) 650 043; senko@ncsp-net.com; IR@nmtp.info