News
Global Ports 2020 Interim Results
Global Ports Investments PLC (“Global Ports” or the “Company”, together with its subsidiaries and joint ventures, the “Group” or the “Global Ports Group”; LSE ticker: GLPR) today announces its operational results and publishes its interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2020.
Information (including non-IFRS financial measures) requiring additional explanation or terms which begin with capital letters and the explanations or definitions thereto are provided at the end of this announcement.
Certain financial information is derived from the management accounts.
For the full version of the 2020 Interim Results announcement please click here.
2020 INTERIM RESULTS SUMMARY
- Operational outperformance of the market continues with the first half 2020 Consolidated Marine Container Throughput up 8.4% year-on-year to 774 thousand TEU against 2.4% year-on-year decline in the Russian container market over the same period
- Consolidated Marine Bulk Throughput of 2.2 million tonnes (+11.9% y-o-y)
- Revenue increased by 1.8% to USD 184.4 million (-8.4% like-for-like)[1]
- Adjusted EBITDA of USD 104.9 million (first half 2019: USD 116 million), like-for-like Adjusted EBITDA Margin of 63.9%
- Operating profit growth of 32.0% to USD 78.7 million
- Profit for the period of USD 23.8 million (first half 2019: USD 36.2 million)
- Strong Free Cash Flow of USD 69.4 million
- Further deleverage success with Net Debt down USD 71.2 million and Net Debt to LTM Adjusted EBITDA reduced to 3.1x (-0.2x compared to 31 December 2019).
Albert Likholet, CEO of Global Ports, commented:
“The Group’s performance over the first six months of 2020 demonstrates the validity of our strategy that has been implemented over the last two years, focusing on clients, productivity, service standards, enhanced IT solutions, deleveraging, and cost management. As a result, the Group has been able to meet the challenges of the recent volatile environment by being an efficient vertically integrated organisation with sufficient cash reserves, having effectively hedged the majority of its FX exposure.
“Despite all the disruption generated by COVID-19, we not only ensured uninterrupted operations for our clients during global lockdown, thereby, safeguarding jobs for our employees and supporting the Russian economy, we also gained market share in both key basins where we operate. In addition, we delivered financially by generating healthy Free Cash Flow and reduced Net Debt by more than USD 70 million, proving the resilience of our business model.
“Although we expect today’s volatility and uncertainty to continue into the medium term, we remain convinced that our ongoing focus on our clients’ needs and best-in-class service offering combined with the Group’s financial prudence create not only resilience to manage such conditions but also puts us on a strong footing for when the market recovers.”
Group financial and operational highlights for the six months ended 30 June 2020
Unless otherwise stated, all comparisons below are for the six month period corresponding to the first half of 2020 in comparison to the first half of 2019.
Operational Highlights
- The Russian container market declined by 2.4% in the first half of 2020 to 2.48 million TEU as the 7.5% growth of containerised export was not sufficient to offset the decline of containerised import by 6.6%, due to the global and local macroeconomic impact of COVID-19.
- Outperforming the market in both export and import, the Group’s Consolidated Marine Container Throughput increased by 8.4% to 774 thousand TEU with Consolidated Marine Container Throughput of full export containers growth of 25.1% and Consolidated Marine Container Throughput of full import containers decline of 1.1%. As a result, the share of full export containers in the Groups’ Consolidated Marine Container Throughput increased from 39% in the first half of 2019 to 45% in the first half of 2020.
- Consolidated Marine Bulk Throughput increased by 12% y-o-y as coal handling at ULCT was in the early ramp-up stage in 1H 2019 resulting in elevated y-o-y growth rates in 1H 2020.
Financial Highlights
- Consolidated revenue increased by 1.8% to USD 184.4 million; excluding the impact of VSC transportation services[2], like-for-like revenue declined by 8.4% driven by a decrease in both Consolidated Container and Non-Container Revenue.
- Like-for-like Revenue per TEU decreased by 10.7% to USD 160.6 as a result of the growing share of full export containers in Group throughput, depreciation of the Russian Rouble against US dollar and additional free storage days provided by the Group to its clients in order to support them on the back of the global and local macroeconomic turmoil following the COVID-19 outbreak.
- Operating profit increased by 32% to USD 78.7 million.
- In response to COVID-19 conditions, cost control measures were implemented to manage and reduce the Group's cost base. Like-for-like Total Operating Cash Costs were successfully and safely reduced by 5.0% to USD 59.8 million despite healthy growth in both container and non-container throughput.
- Adjusted EBITDA decreased by 9.6% to USD 104.9 million as cost control improvements and volume growth could not offset the decline in Revenue per TEU and US dollar equivalent of Russian Rouble nominated bulk handling tariffs due to the depreciation of the Russian Rouble as a result of COVID-19. Profitability maintained with like-for-like Adjusted EBITDA Margin of 63.9%.
- The Group’s capital expenditure in the first half of 2020 was USD 11.5 million and was focused on planned maintenance projects, scheduled upgrades of existing container handling equipment and customer service improvement initiatives.
- The Group generated healthy USD 69.4 million of Free Cash Flow demonstrating the resilience of the business model.
- The Group reduced Net Debt by USD 71.2 million over the six month period. The Group continues to prioritise deleveraging over dividend distribution.
- In line with the Group’s focus on deleveraging, Net Debt to LTM Adjusted EBITDA decreased from 3.3x as of 31 December 2019 to 3.1x as at the end of the reporting period.
Outlook
Despite the growing resilience of the Russian container market as it continues its journey towards full import-full export balance, in 2Q 2020 we saw a decline in full container import and decelerating growth rates in full export on the back of the global and local macroeconomic turmoil following the COVID-19 outbreak. We expect high volatility and this challenging environment to continue in 2H 20 with ongoing low visibility.
The growth of containerised export, on the back of the decline in containerised import, is having a negative impact on the mix of prices and services provided by the Group. When combined with the depreciation of the Rouble, the Group now expects a high single-digit to low double-digit decline in Revenue per TEU in 2020.
Further information is available in the following Appendices:
- Appendix 1: Results of operations for Global Ports for the six month period ended 30 June 2020;
- Appendix 2: Reconciliation of Additional data (non-IFRS) to the Consolidated Financial Statements;
- Appendix 3: Definitions and Presentation of Information;
- Appendix 4: Investor Presentation.
Market data
Market data used in this press-release, as well as certain statistics, including statistics in respect of market growth, volumes of third parties and market share, have been extracted from official and industry sources and other third-party sources, such as the Association of Sea Commercial Ports (“ASOP”) the Central Bank of the Russian Federation and the Russian Federal State Statistics Service, among others.
Other
Pursuant to Article 2.1(i)(ii) of the Transparency Directive (2004/109/EC) and Rule 6.4.2 of the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority, the Company confirms that it has chosen the United Kingdom as its Home State.
Downloads
2020 Interim Results announcement (full version)
2020 Interim Results presentation
The consolidated financial statements for the six month period ended 30 June 2020 for Global Ports are available for viewing and downloading at https://www.globalports.com/en/investors/reports-and-results/.
LEGAL DISCLAIMER
Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of Global Ports. You can identify forward-looking statements by terms such as “expect”, “believe”, “anticipate”, “estimate”, “intend”, “will”, “could,” “may” or “might” or the negative of such terms or other similar expressions. Any forward-looking statement is based on information available to Global Ports as of the date of the statement and, other than in accordance with its legal or regulatory obligations, Global Ports does not intend or undertake to update or revise these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements involve known and unknown risks and Global Ports wishes to caution you that these statements are only predictions and that actual events or results may differ materially from what is expressed or implied by these statements. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of Global Ports, including, among others, general political and economic conditions, the competitive environment, risks associated with operating in Russia and market change in the industries Global Ports operates in, as well as many other risks related to Global Ports and its operations. All written or oral forward-looking statements attributable to Global Ports are qualified by this caution.
[1] As a result of the new terms of certain sales agreement, in 1H 2020 VSC acted as a principal vs as an agent at the beginning of 2019: previously the net result of revenue from transportation services and associated cost was included in the consolidated revenue. Since the middle of 1H 2019 full revenue and associated costs have been recognized in consolidated revenue and transportation expenses accordingly. This Adjusted EBITDA neutral change resulted in additional USD 20.4 million to consolidated revenue (USD 2.2 million in the first half of 2019) and USD 20.4 million (USD 2.2 million in the first half of 2019) to cost of sales in the first half of 2020.
[2] As a result of the new terms of certain sales agreement, in 1H 2020 VSC acted as a principal vs as an agent at the beginning of 2019: previously the net result of revenue from transportation services and associated cost was included in the consolidated revenue. Since the middle of 1H2019 full revenue and associated costs have been recognized in consolidated revenue and transportation expenses accordingly. This Adjusted EBITDA neutral change resulted in additional USD 20.4 million to consolidated revenue (USD 2.2 million in the first half of 2019) and USD 20.4 million (USD 2.2 million in the first half of 2019) to cost of sales in the first half of 2020
[3] Company estimates based on 1H 2020 throughput and the information published by the “ASOP”.
[4] In which Eurogate currently has a 20% effective ownership interest.
[5] In which CMA Terminals currently has a 25% effective ownership interest.
[6] In each of which CMA Terminals currently has a 25% effective ownership interest.
[7] In which CMA Terminals currently has a 25% effective ownership interest.
[8] According to public available data at www.delo-group.com.
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About the Company
Global Ports Group is a leading operator of Russian marine terminals. Global Ports runs port facilities that focus on handling various cargo and is the No. 1 operator in Russia by capacity of terminals and container volumes.
Global Ports, the part of Delo Group, operates a network of five marine container terminals in Russia and two in Finland, and a logistics complex near Saint Petersburg.
Delo Group is the major Russian transportation and logistics holding company that owns and operates port container terminals in the Azov and Black Sea, Baltic and Far-Eastern basins, a wide network of railway container terminals, a fleet of containers and flatcars. The headquarters of the Group is the Management Company “Delo”, 70% is owned by the Group’s founder Sergey Shishkarev and 30% owned by State Corporation Rosatom.
The Group’s stevedore business is represented by DeloPorts holding and the leading operator of port container terminals Global Ports. TransContainer and Ruscon assemble the transportation and logistics business of Delo Group.
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