TRCN.L Regulatory News (TRCN)

FOR IMMEDIATE RELEASE

 21 January 2016

OPERATING RESULTS FOR THE FOURTH QUARTER AND THE FULL YEAR OF 2015

Public Joint Stock Company "TransContainer" ("TransContainer" or the "Company") (LSE: TRCN) announces its preliminary operating results for the fourth quarter and the full year of 2015. The operating results were affected by the challenging conditions in the rail container transportation market, as a direct result of the continuing decline in Russian industrial production and consumer demand. In the reporting period, TransContainer's market share continued to expand year on year despite the decline in Russian rail container transportation market volumes. This was mainly as a result of the Company's flexible pricing policies and improved service quality.

Rail container transportation

In the fourth quarter of 2015 the Russian container transportation market declined by 5.2% year on year compared to a 10.8% year on year drop in the third quarter of 2015. The market has been supported by growth in domestic transportation, which reached 1.9% year on year, despite an 11.8% decline in the international transportation market due to a decline in transit and import transportation.

The Company's rail container transportation volumes in Russia for the fourth quarter of 2015 decreased in line with the market by 5.3% year on year to 354 thousand twenty-foot equivalent units ("TEU"). On a quarter on quarter basis, the Company's transportation volumes in the fourth quarter of 2015 increased by 3.2% versus the third quarter of 2015. The Company's market share remained flat at 45.9% compared to 46.0% in the fourth quarter of 2014.

The Company's transportation volumes in the reporting quarter were driven by a 17.8% growth in import transportation despite the 12.2% decline in overall Russian container transportation imports. This is mainly as a result of the management team's efforts to improve business in the Asia-Pacific countries to maintain balance in the supply of the Company's own containers between import, domestic and export routes.

The Company's export volumes are in line with the corresponding figures seen in the Russian container transportation market. The decline in the Company's domestic transportation follows a reduction in the Company's share in the domestic transportation of empty containers, as a result of an effort to improve container fleet balancing.

The decline in transit volumes resulted from lower volumes of transit transportation between the Far East and Central Asia, which, in turn, was heavily affected by a drop in the transportation of car components.

Transportation of containers by TransContainer's fleet in 4Q 2015 (ISO Loaded + Empty), 000' TEU

The Company's rail container transportation volumes for the full year of 2015 amounted to 1,390 thousand TEU, compared to 1,467 thousand TEU for the year of 2014; this is a reduction of 5.3% year on year, while the total rail container transportation market in Russia fell by 8.0% year on year respectively. The decrease in the Company's rail container transportation volumes was mainly driven by an 11.9% decline in international transportation, which was partly offset by a 0.8% growth in domestic volumes caused by the strong demand in the Company's container fleet. In 2015, TransContainer's market share increased to 47.0% from 45.6% in 2014.

Transportation of containers by TransContainer's fleet in 2015 (ISO Loaded + Empty), 000' TEU

The Company's revenue-generating container transportation1 volumes in Russia amounted to 261 thousand TEU in the fourth quarter of 2015, down 7.7% year on year, which increasing by 2.7% quarter on quarter. For the full year of 2015, revenue-generating container transportation volumes were down 8.8% year on year to 1,031 thousand TEU. The difference in the dynamics of revenue-generating volumes and total transportation volumes is primarily a result of transportation using the Company's containers having an increased share of total transportation via the Company's rolling stock.

Terminal handling

In the fourth quarter of 2015, the Company's throughput in the Russian rail container terminal network decreased by 4.9% to 320 thousand TEU, compared to 336 thousand TEU for the same period of 2014.

For the full year of 2015, Company's rail container terminal network throughput in Russia amounted to 1,219 thousand TEU, down 7.6 % year on year, which was in line with the market trends.

Asset utilisation

In the fourth quarter of 2015, flatcar empty run ratios marginally improved, and remained flat at 7.4% for the full year of 2015. Meanwhile, container empty runs continued to deteriorate throughout the reporting year, reflecting the challenging market environment.

The improvement in the container turnover for the full year 2015 primarily reflects strong customer demand for the Company's containers. This increased demand was driven by a shortage of sea shipping lines' containers in the Russian market during the first three quarters of 2015. The deterioration of container turnover in the last quarter of the year resulted primarily from a resumed inflow of shipping lines' containers to the Russian market. Growth in flatcar turnover was primarily driven by an increase in the average distances travelled by the Company's flatcars.

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About TransContainer

TransContainer (LSE ticker: TRCN) is the leading intermodal container transportation company in Russia. It is the market leader in Russia by flatcar fleet size, container transportation by rail and rail-side container terminal throughput. As of 30 September 2015, it operated 24,963 flatcars and 63,560 ISO containers. It owns a network of 46 rail-side container terminals in Russia, 19 rail-side terminals in Kazakhstan (through its joint venture company KedenTransService) and operates one terminal in Slovakia. Company's sales network comprises more than 130 sales offices across Russia as well as presence in the CIS, Europe and Asia. TransContainer is listed at Moscow Exchange and LSE. Company's major shareholder with 50% +2 shares is United Transportation and Logistics Company, established by Russian Railways, Belorussian Railway and Kazakhstan Temir Zholy.