NEWS

Interim 2022 Results and Market Update

Globaltrans Investment PLC (the “Company” and together with its consolidated subsidiaries “Globaltrans” or the “Group”), (LSE/MOEX ticker: GLTR) today announces its financial and operational results for the six months ended 30 June 2022 along with the update on the recent developments.

In this announcement, the Group has used certain measures not recognised by EU IFRS or IFRS (referred to as “non-IFRS measures”) as supplemental measures of the Group’s operating performance. The management believes that these non-IFRS measures provide valuable information to readers, because they enable them to focus more directly on the underlying day-to-day performance of the Group’s business. The Company also reports certain operational information to illustrate the changes in the Group’s operational and financial performance during the reporting periods. Certain financial information which is derived from the management accounts is marked in this announcement with an asterisk {*}. Information (non-IFRS financial and operating measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions are provided at the end of this announcement. Reconciliations of the non-IFRS measures to the closest EU IFRS measures are included in the body of this announcement. The presentational currency of the Group’s financial results is the Russian rouble (“RUB”).

KEY HIGHLIGHTS

• Unprecedented environment kept market under pressure with strong Q1 2022 followed by deceleration in bulk cargo market volumes and substantial downward pressure in gondola market pricing.
• Tanker segment market volumes remained relatively stable with continued robust market pricing.
• Globaltrans improved its operational efficiency with Service Contracts intact.
• Strong financial results were delivered with growth achieved across all key metrics.
• Robust financial profile maintained with further deleveraging.
• Expansion CAPEX remained on hold in H1 2022.
• Dividends remain suspended.

Commenting on Globaltrans’ interim 2022 results, CEO Valery Shpakov said:

“Globaltrans again demonstrated the strength of its operating model by rapidly adjusting its logistical footprint to respond to the current unprecedented circumstances. We maintained our focus on efficiency and saw improvements both at an operational level and in terms of our financial results.

Our strong performance and robust free cash flow generation supported further strengthening of our balance sheet as we continued to deleverage. While market visibility remains low, I have confidence that the model that has stood us in good stead so far will continue to successfully underpin our business and our ability to create value for shareholders.”

FINANCIAL RESULTS

Strong financial performance, robust Free Cash Flow and further deleveraging with dividends remaining on hold

• Revenue rose to RUB 48.4 billion with Adjusted Revenue increasing to RUB 42.6 billion (+26% compared to H2 2021) largely on the back of the continued recovery in gondola market pricing from the depressed levels of H1 2021.
• Profit for the period increased 13% compared to H2 2021 rising to RUB 12.3 billion.
• Adjusted EBITDA rose 45% compared to H2 2021 increasing to RUB 27.0 billion, supported by the Group’s continued cost control (Total Operating Cash Costs up 3% half on half).
• Robust Free Cash Flow of RUB 6.4 billion despite the acquisition of the 40% outstanding stake in BaltTransServis^[1].
• RUB 3.7 billion of impairment of property, plant and equipment reflecting the blocking of about 3.3k units of rolling stock (mostly gondolas) in Ukraine.
• Dividend payments continue to be suspended due to the technical limitations regarding upstreaming cash to the holding company incorporated in Cyprus.
• Net Debt reduced 31% to RUB 12.8 billion compared to the end of 2021; further deleveraging with Net Debt to LTM Adjusted EBITDA^[2] at 0.28x compared to 0.62x at the end of 2021.
• All the Group’s debt has fixed interest rates and is denominated in RUB, the functional currency of the Group.

OPERATIONAL PERFORMANCE

Improved operational efficiency and rapid logistics readjustments supported by the Group’s best-in-class operational capabilities

• The Group successfully adjusted its logistics in the challenging operational environment with Empty Run Ratio for gondola cars improving to 42% (H1 2021: 46%). Total Empty Run Ratio (for all types of rolling stock) improved to 50% (H1 2021: 52%).
• The Group’s Freight Rail Turnover was 3% lower year on year in H1 2022 reflecting the reorientation of clients’ cargo flows and overall volatility in logistics.
• Average pricing remained strong for most of H1 2022 reflecting a continued recovery in gondola market pricing from the depressed levels of H1 2021 with continued solid pricing in the oil products and oil segment. However, from late Q2 2022, gondola market pricing substantially deteriorated.
• The Group maintained its focus on Service Contracts^[3] and client retention: Service Contracts remain intact contributing about 56% of the Group’s Net Revenue from Operation of Rolling Stock in H1 2022.
• Globaltrans successfully substituted units by expanding leased-in fleet as well as adjusting its logistical footprint in order to manage the blocking of about 3.3k units of the Group’s rolling stock (mostly gondola cars) in Ukraine.

MARKET REVIEW

Market under pressure due to the unprecedented environment

• Following a strong Q1 2022 with overall Russian freight rail turnover up 4.0% year on year, cargo volumes and freight rail turnover started to deteriorate largely on the back of the weakening bulk cargo segment.
• Overall Russia’s freight rail turnover rose 0.7% year on year in January-August 2022 with volumes down 3.4% year on year over the same period. Looking ahead, visibility remains low.
• Ongoing transformation of logistics towards Russia’s Far East increases the share of long-distance routes supporting overall freight rail turnover (measured in tonnes-km) thereby increasing demand for railcars.

Non-oil (bulk) cargo volumes under pressure from Q2 2022

• Overall non-oil (bulk) cargo volumes decreased 4.2% year on year in January-August 2022 which was largely driven by the deterioration in coal (-5.8% year on year) and metallurgical cargoes (-3.9% year on year) volumes^[4]. Gondola market pricing recovered from the depressed levels of H1 2021 but have substantially deteriorated since late Q2 2022 reflecting demand volatility.

Demand in oil products and oil segment stabilised

• Overall Russia’s oil products and oil volumes increased 0.2% year on year in the January-August 2022 period overcoming volatility.
• Market pricing conditions in the oil products and oil segment remained robust.

RECENT DEVELOPMENTS AND MANAGEMENT FOCUS

Market volumes and gondola market pricing remain under pressure and visibility is low

• Market volumes have been under pressure since Q2 2022 reflecting the weakening bulk cargoes market, with overall Russian freight rail turnover down 1.0% year on year and transportation volumes down 5.3% in July-August 2022.
• Gondola market pricing continues to be under downward pressure as of today driven by weakening demand. Tanker market pricing remains robust.
• Logistics continues to be adapted to the new environment by rerouting most of the cargo flows to Russia’s Far East region.
• Cost pressures accelerated with regulated RZD tariffs for the traction of empty railcars up 18.6% over the first half of 2022 following increases on 1 January and 1 June 2022^[5].

Management focus

• Continued focus on flexibility of logistics and operational efficiency in a volatile market as well as strict cost control in response to accelerated inflationary pressures.
• Expansion CAPEX will be subject to identifying attractive opportunities.
• Value accretive cancellation of treasury shares acquired under the buyback programmes approved^[6].
• Dividend payments continue to be suspended due to the technical limitations regarding upstreaming cash to the holding company incorporated in Cyprus.
• Ongoing analysis of options to address limitations of corporate structure and listing constraints.

DOWNLOADS

• Interim 2022 results announcement (full version)
• Interim 2022 results presentation
• Condensed consolidated interim financial information (unaudited) for six months ended 30 June 2022
• Selected operational information for the six months ended 30 June 2022

The selection of historical operational and financial information are available on Globaltrans’ corporate website (www.globaltrans.com).

ANALYST AND INVESTOR EVENT

The release of the Group’s financial and operational results will be accompanied by an analyst and investor event hosted by Valery Shpakov, CEO, and Alexander Shenets, CFO.

Date: Monday, 19 September 2022
Time: 13.00 London / 15.00 Moscow / 08.00 New York
Webcast:www.webcast-eqs.com/globaltrans20220919
Event language: There will be a simultaneous translation of the webcast with both English and Russian available.
Q&A Session: Please note that this will be a listen-only session. Should you have any questions, please submit them by 11:30 Moscow time on 19 September 2022 to [email protected].
Replay: A replay of the webcast will be available on the Globaltrans website (www.globaltrans.com) shortly after the end of the live event.

VIRTUAL NON-DEAL ROADSHOW

The results announcement will be followed by a virtual non-deal roadshow. If you are interested in talking to the Company, please contact the IR Team; details are below.

ENQUIRIES
Globaltrans Investor Relations
Mikhail Perestyuk / Daria Plotnikova
+357 25 328 860
[email protected]

For Russian media
Anna Vostrukhova
+357 25 328 863
[email protected]

For international media
Lightship Consulting
Laura Gilbert
+44 7799 413351
[email protected]

NOTES TO EDITORS
Globaltrans Investment PLC (“Company” and together with its consolidated subsidiaries “Globaltrans” or the “Group”) is a leading freight rail transportation group with subsidiary operations across Russia, the CIS and the Baltic countries.

The Company was founded in 2004 by a group of entrepreneurs who combined their freight rail businesses under the single brand Globaltrans. These founders remain key shareholders of the Group.

Throughout its years of operation, the Company has pursued a prudent approach to investment, expanding its fleet both by means of organic growth and through the acquisition of other rail operators. Globaltrans’ total fleet is currently almost three times larger than it was at the time of the Company’s IPO in 2008.

The Group’s dividend policy establishes a transparent and straightforward approach to the payment of dividends and is supported by a long history of delivering attractive shareholder remuneration.

Globaltrans global depositary receipts (GDRs) have been traded on the Main Market of the London Stock Exchange (ticker symbol: GLTR) since May 2008^[7] and on the Level One quotation list of the Moscow Exchange since October 2020 (ticker symbol: GLTR).

Due to its vast logistics capabilities, the Group is able to efficiently manage industrial cargo flows, transporting metallurgical cargoes, oil products and oil, coal and construction materials. The Group serves a broad range of clients in Russia and the CIS countries.

Globaltrans has a total fleet (including owned and leased in under finance and operating leases) of more than 67 thousand units as of the end of the first half of 2022, of which about 92% are owned by the Company. The core of the fleet is universal gondola cars used for a broad range of bulk cargoes (68% of total fleet) and tank cars for transporting oil products and oil (30% of total fleet). Globaltrans also manages its own fleet of mainline locomotives with 71 units that mostly provide traction for its block trains.

The Group’s logistics management principally aims to provide reliable services, responding promptly and flexibly to customer needs, while achieving a good level of profitability for the business. The main component of the Group’s centralised logistics system is its single dispatching centre that monitors every aspect of Globaltrans’ fleet operation. By effectively managing shipments and routes, Globaltrans ensures high utilisation of its fleet and achieves maximum productivity and quality of service.

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

PRESENTATION OF INFORMATION
The information in this announcement is subject to verification, completion and change. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this announcement. None of the Company nor any of its shareholders, directors, officers or any other person accepts any liability whatsoever for any loss howsoever arising from any use of the contents of this announcement or otherwise arising in connection therewith. This announcement does not constitute an offer or an advertisement of any securities in any jurisdiction.

The financial information contained in this announcement is derived from the condensed consolidated interim financial information (unaudited) of Globaltrans Investment PLC (“the Company” and together with its consolidated subsidiaries “Globaltrans” or “the Group”) as at and for the six months ended 30 June 2022 and 2021 and prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting” as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the consolidated Management report and consolidated financial statements for the year ended 31 December 2021, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and the Cyprus Companies Law, Cap. 113.

The Group’s condensed consolidated interim financial information (unaudited), selected operational information as at and for the six months ended 30 June 2022 and 2021 along with historical financial and operational information are available at Globaltrans’ corporate website (www.globaltrans.com).

The presentation currency of the Group’s consolidated financial statements is the Russian rouble (“RUB”). In this announcement, the Group has used certain measures not recognised by EU IFRS or IFRS (referred to as “non-IFRS measures”) as supplemental measures of the Group’s operating performance. The management believes that these non-IFRS measures provide valuable information to readers, because they enable them to focus more directly on the underlying day-to-day performance of the Group’s business.

The Company also reports certain operational information to illustrate the changes in the Group’s operational and financial performance during the reporting periods.

Certain financial information which is derived from management accounts is marked in this announcement with an asterisk {*}.

Information (non-IFRS financial and operating measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions are provided at the end of this announcement. Reconciliations of the non-IFRS measures to the closest EU IFRS measures are included in the body of this announcement.

Rounding adjustments have been made in calculating some of the financial and operational information included in this announcement. As a result, numerical figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that precede them.

The Group has obtained certain statistical, market and pricing information that is presented in this announcement on such topics as the Russian freight rail transportation market and related subjects from the following third-party sources: Federal State Statistics Service of Russian Federation (“Rosstat”), JSC Russian Railways (“RZD”) and the Federal Antimonopoly Service (“FAS”). The Group has accurately reproduced such information and, as far as it is aware and is able to ascertain from information published by such third-party sources, no facts have been omitted that would render the reproduced information inaccurate or misleading. The Group has not independently verified this third-party information. In addition, the official data published by Russian governmental agencies may be substantially less complete or researched than that of more developed countries.

All non-IFRS financial and operational information presented in this announcement should be used only as an analytical tool, and investors should not consider such information in isolation or in any combination as a substitute for analysis of the Group’s consolidated financial statements and condensed consolidated interim financial information reported under EU IFRS, which are available the Globaltrans’ corporate website www.globaltrans.com.

LEGAL DISCLAIMER
The information in this announcement is subject to verification, completion and change. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this announcement. None of the Company nor any of its shareholders, directors, officers or any other person accepts any liability whatsoever for any loss howsoever arising from any use of the contents of this announcement or otherwise arising in connection therewith.

This announcement may contain 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”, “estimate”, “anticipate”, “intend”, “will”, “could”, “may”, or “might”, the negative of such terms or other similar expressions. These forward-looking statements include matters that are not historical facts and statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, Globaltrans’ results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and that Globaltrans’ actual results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which Globaltrans operates may differ materially from those described in or suggested by the forward-looking statements contained in this announcement. In addition, even if Globaltrans’ results of operations, financial condition, liquidity, prospects, growth strategies and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in future periods. The Company does not intend to update this announcement or reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause actual results to differ materially from those contained in forward-looking statements of Globaltrans, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, market changes in the Russian freight rail market, as well as many of the risks specifically related to Globaltrans and its operations. No reliance may be placed for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness.

^{[1] BaltTransServis is one of the leading Russian freight rail operators of tank cars, with a strong market position, long-term service contracts and unique competencies in operating its own locomotives; total fleet of 13.1k units as of end of 2021 (including 5.5k units leased in from other Group subsidiaries and 1.7k units leased in from third parties).}

^{[2] For the last twelve months period.}

^{[3] Service Contracts represent contracts with an initial term greater than one-year that stipulates an obligation to transport a specified amount of cargoes with the client. As of the end of H1 2022 Globaltrans had six service contracts.}

^{[4] Coal including coke; metallurgical cargoes including ferrous metals, scrap metal and ores.}

^{[5] An increase of 6.8% from 1 January 2022 and an additional increase of 11% from 1 June 2022 (compared to the level of the January-May 2022 period).}

^{[6] The cancellation of 422,657 shares (representing 0.24% of the Company's share capital) purchased in the form of GDRs under the buyback programmes and held in treasury was approved by the Board of Directors. Following the cancellation of these shares the total number of shares of the Company in issue (including GDRs) will be 178,318,259 with no shares/GDRs held in treasury. The respective announcement will be released once the cancellation is completed.}

^{[7] Imposed suspension of GDRs trading on the London Stock Exchange continued as of the date of publication.}