ENRU

Interim Results for the six months ended 30 June 2013

19.08.2013

Globaltrans Investment PLC (the "Company" and together with its consolidated subsidiaries "Globaltrans" or the "Group"), (LSE ticker: GLTR) today announces its financial and operational results[1] for the six months ended 30 June 2013.

Certain financial information which is derived from the management accounts is marked in this announcement with an asterisk {*}. Information (non-GAAP and operational measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions thereto are provided at the end of this announcement.

The Group's financial and operational results for the six months ended 30 June 2013 include results of Ferrotrans (renamed from Metalloinvesttrans) which have been consolidated from 16 May 2012 and Steeltrans (renamed from MMK-Trans) which have been consolidated from 12 February 2013.

Certain comparable financial and operational information has been re-presented for the six months ended 30 June 2012 to conform to changes in the presentation and accounting for operations with Engaged Fleet[2] for the year ended 31 December 2012 and the six months ended 30 June 2013.

Financial highlights

  • Adjusted Revenue up 14% year-on-year to USD 735.6 million*;
  • Adjusted EBITDA up 6% to USD 346.7 million* with Adjusted EBITDA Margin of 47%*;
  • Strong cash flow generation with net cash from operating activities of USD 285.9 million;
  • Profit for the period declined 7% year-on-year to USD 148.3 million;
  • Moderate leverage with Net Debt to Adjusted EBITDA for the 12 months to end of June 2013 of 1.6x*. The majority of Group debt is denominated in Russian roubles with fixed interest rates.

Operational highlights

  • Successful integration of acquisitions providing for strong growth in business volumes and continued market outperformance with Globaltrans' Freight Rail Turnover up 47% year-on-year to 78.7 billion tonnes-km[3] despite the overall Russian Freight Rail Turnover being down 3%;
  • Leadership position enhanced with market share rising to 8.5%3 of overall Russian freight rail transportation volumes with strongest share gains in metallurgical cargoes (rising to 23.4%3);
  • Improved operational efficiency with Empty Run Ratio for gondola cars down to 37% (H1 2012: 42%), largely due to integration of logistics of acquired businesses, and Total Empty Run Ratio down to 53% (H1 2012: 60%);
  • Resilient average pricing given market context with Average Price per Trip down 5% year-on-year in Russian rouble terms (Average Distance of Loaded Trip down 3% year-on-year).

Comments

Sergey Maltsev, CEO of Globaltrans Investment PLC, said:
"Globaltrans' business model of operating both gondola and rail tank cars has again proven its worth with the transportation of oil products and oil proving robust, balancing the weaker environment for bulk commodities transportation. In the first six months of this year, we continued to outperform the market despite the challenging economic environment. In the segment for rail transportation in gondola cars, we saw significant benefits from the integration of recent acquisitions and the centralisation of gondola logistics from a single dispatching centre.

"We remain prudent in capital allocation and believe the Russian freight rail market remains attractive from an investment perspective. The majority of railcars and locomotives in the market are obsolete and require replacement in the near term, benefitting companies like Globaltrans with younger fleets and the ability to invest to underpin future growth. The highly fragmented market and increased trend for outsourcing as well as the current macroeconomic headwinds are likely to drive further market consolidation as weaker players remain under pressure.

"Our experienced management team, sensible approach to CAPEX and ongoing focus on generating operational efficiencies mean we have the leadership, financial strength and operational platform to deliver a strong performance for our shareholders throughout the economic cycle. We remain confident of continuing to play a leading role in the consolidation of the sector, growing our market share and creating long-term value for our shareholders."

Mr. Michael Zampelas, an Independent Non-Executive Director and Chairman of the Board of Globaltrans, said:
"In the first six months of 2013 Globaltrans capitalised on its balanced fleet structure and long-term service contracts with high-quality clients to deliver a resilient performance and strong operating cash flow despite the difficult economic context.

"Globaltrans continues to pursue its prudent approach to capital allocation. In line with this approach the Board supports management's recommendation not to invest in new railcars in 2013 but to focus on further deleveraging the Group's balance sheet and returning cash to shareholders in the form of dividends.

"While the Group remains open to selective M&A opportunities that meet its investment criteria, in periods of sustained low investment activity the Board supports increasing the dividend payout ratio for the year to not less than 50% of Imputed Consolidated Net Profit, in line with the Group's track record of providing attractive returns to its shareholders."

Downloads

Analyst and Investor Conference Call

An analyst and investor conference call will be hosted by Sergey Maltsev, Chief Executive Officer and Alexander Shenets, Chief Financial Officer.

Date: Tuesday, 3 September 2013
Time: 14.00 London / 9.00 New York (EDT) / 17.00 Moscow

To participate in the conference call please dial one of the following numbers and ask to be put through to the "Globaltrans" call:

UK toll free: 0808 109 0700
International: +44 (0) 20 3003 2666

As there will be simultaneous translation for the first part of the call (slide presentation), you should state whether you prefer to listen in English or Russian. During the Q&A session, all participants will hear both languages.

Webcast facility
There will also be a webcast of the call available through the Globaltrans website (http://www.globaltrans.com). Please note that this will be a listen-only facility.

ENQURIES
Globaltrans Investor Relations
Mikhail Perestyuk
+357 25 503 153
[email protected]

For international media
StockWell Communications
Laura Gilbert / Zoë Watt
+44 20 7240 2486
[email protected]

NOTES TO EDITORS
Globaltrans is a leading private freight rail transportation group with operations in Russia, the CIS and the Baltic countries. The Group's main business is the provision of freight rail transportation services. Globaltrans provides services to more than 650 customers and its key customers include a number of large Russian industrial groups in the metals and mining and the oil products and oil sectors.

The Group has a total fleet of about 65 thousand units of rolling stock with an average age of about eight years[15]. Universal gondola cars and rail tank cars constitute the backbone of the Group's fleet. About 95% of the Total Fleet is owned by the Group. In the first six months of 2013 the Group's Freight Rail Turnover (including Engaged Fleet) was 78.7 billion tonnes-km. The Group's market share (including Engaged Fleet) was 8.5% of overall Russian freight rail transportation volumes in the first six months of 2013.

Globaltrans' global depositary receipts (ticker symbol: GLTR) have been listed on the Main Market of the London Stock Exchange since May 2008. Globaltrans was the first freight rail transportation group with operations in Russia to have an international listing.

To learn more about Globaltrans, please visit http://www.globaltrans.com

LEGAL DISCLAIMER
Some of the information in this announcement 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', 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 Globaltrans operates in, as well as many other risks specifically related to Globaltrans and its operations.

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[1] The Group's financial performance in the first six months of 2013 was affected by a 2% depreciation of the average exchange rate of the Russian rouble (Functional Currency of the Company, its Cyprus and Russian subsidiaries) against the US dollar (the Group's financial information presentation currency) compared to the first six months of 2012. The first half 2013 period end exchange rate of the Russian rouble against the US dollar weakened by 8% compared to the end of 2012.

[2] The cost of services provided by other transportation organisations is now shown as a separate line item within "Cost of sales" whereas previously it was included within "Infrastructure and locomotive tariffs: empty run trips, other tariffs and services provided by other transportation organisations" in "Cost of sales". Adjusted Revenue and Total Operating Cash Costs are now calculated net of the "pass through" item "Services provided by other transportation organisations". Adjusted EBITDA Margin is now calculated as Adjusted EBITDA divided by Adjusted Revenue net of the "pass through" item "Services provided by other transportation organisations".

[3] Including Engaged Fleet.

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