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Global Ports Inv (GLPR)

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Wednesday 05 September, 2018

Global Ports Inv

2018 Interim Results

RNS Number : 8100Z
Global Ports Investments PLC
05 September 2018
 

 

 

For immediate release                                                                                                               5 September 2018

Global Ports Investments PLC

2018 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 2018.

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

Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2018 is avaiable here: http://www.rns-pdf.londonstockexchange.com/rns/8100Z_1-2018-9-5.pdf

SUMMARY

The growth of the Russian container market continued in the first half of 2018, with a 12% increase in volumes to 2.43 million TEU. This trend was principally driven by continuing growth in imports due to healthy consumer demand, along with the increased containerisation of exports.

During the first half of 2018 the Group continued to implement its strategy of harnessing the recovery of the container market, developing additional revenue streams, improving operational efficiency, maximising free cash flow generation, and conducting ongoing deleveraging.

The growth of Global Ports' Consolidated Marine Container Throughput accelerated to 15.9% year-on-year in the first half of 2018 outpacing the market. The Group also continued to deliver strong growth in bulk throughput posting a 21.6% year-on-year increase in Consolidated Marine Bulk Throughput in the first half of 2018.

As a result, Revenue increased by 7.9% to USD 175.3 million. Gross profit increased by 26.8% to USD 104.7 million and Adjusted EBITDA grew by 11.8% to USD 108.7 million*, driven by strict cost control.

The Group's Net Debt[1] was reduced by a further USD 38.5 million* over the period with Net Debt to LTM Adjusted EBITDA decreasing to 3.9x* as of 30 June 2018 from 4.3x* as at the end of 2017.

 

Group financial and operational highlights for the six months ended 30 June 2018

●       The Russian container market continued its recovery in the first half of 2018, resulting in 12% volume growth for the period. Total Russian container market throughput reached 2.43 million TEU.

●       The Group's Consolidated Marine Container Throughput increased 15.9% to 681 thousand TEU in the first half of 2018 compared to 587 thousand TEU in the same period of 2017. The growth rate of the Group's Consolidated Marine Container Throughput outpaced that of the Russian container market.

●       The Group focused on increasing bulk cargo volumes to improve utilisation rates at its terminals. As a result, Consolidated Marine Bulk Throughput increased by 21.6% to 1.6 million tonnes in the first half of 2018, driven by growth in bulk cargoes at PLP and ULCT as well as in coal handling at VSC.

●       Revenue in the first half of 2018 increased by 7.9% to USD 175.3 million compared to USD 162.5 million in the first half of 2017. This was driven by a 2.9% increase in Consolidated Container Revenue and a 25.6% growth in non-container revenue. The growth in Consolidated Container Revenue was driven by a 15.9% increase in Consolidated Marine Container Throughput. This was partially offset by an 11.2% decline in Revenue per TEU. Only a low single digit percentage of the reduction in Revenue per TEU was attributable to change in tariffs, and the remainder is largely attributable to lower share of imports and the change in customer and service mix.

●       The Group continued to exert a strict control over costs. Total Operating Cash Costs increased by only 2.2% during the reporting period despite double digit growth in throughput of both container and non-container cargoes. FX adjusted Total Operating Cash Costs[2] increased by around 5.1%.

●       Gross Profit in the first half of 2018 increased 26.8% to USD 104.7 million* or by 11% adjusted for impairments that took place in the first half of 2017.

●       Adjusted EBITDA in the first half of 2018 increased 11.8% to USD 108.7 million* mainly due to growth in throughput and strict control over cash costs. 

●       Adjusted EBITDA margin improved by 213 basis points from 59.9% in the first half of 2017 to 62.0%* in the first half of 2018.

●       Operating profit in the first half of 2018 stood at USD 90.2 million, 6.4x higher than the first half of 2017. This substantial increase was driven both by the growth in Gross profit and the fact that 1H 2017 was negatively impacted by one-off non-cash items of USD 11.4 million.

●       The Group's capital expenditure on a cash basis was USD 13.5 million in the first half of 2018, in line with the Group's mid-term guidance of USD 25-35 million per annum. Capital expenditure was focused on planned maintenance projects, the scheduled upgrade of existing container handling equipment and coal handling equipment at VSC as well as environmental protection measures related to coal handling.

●       Net cash from operating activities increased by USD 8.0 million, or 10.2%, from USD 78.2 million in the first half of 2017 to USD 86.2 million in the first half of 2018.

●       Free Cash Flow remained strong at USD 72.7 million*, increasing by 3.3% compared to the first half of 2017.

●       The Group continued to deleverage and reduced Net Debt[3] by a further USD 38.5 million* compared to 31 December 2017. The Group decreased its Total Debt3 by USD 43.1 million* during the first half of 2018 with Total Debt3 down more than USD 510 million* since the NCC Group acquisition at the end of 2013.

●       Net Debt to LTM Adjusted EBITDA decreased from 4.3x to 3.9x during the first half of 2018.

●       In September 2018 the Group completed the previously announced[4] sale of its holding in JSC «Logistika-Terminal» ("LT"), one of the Group's two inland terminals, to PJSC  TransContainer for a consideration of 1.9 billion Russian roubles. As previously announced, the proceeds of the sale will go towards further deleveraging.

●     In August 2018, an amendment to the Law on Seaports came into force which prescribes that all handling tariffs in Russian ports should be expressed in Russian roubles. The law stipulates the required currency of denomination of tariffs, but it does not place any restrictions on port operators' ability to change tariff levels. Prices for stevedoring services in Russian ports remain market-driven and are not subject to regulation. Therefore, the Group believes that it will retain its ability to revise pricing policy and tariff structures in response to changes in the industry or the macroeconomic environment. The full impact of this amendment is not yet certain.

●       In line with statements made in March 2015, the Group continues to prioritise deleveraging over dividend distribution.

Vladimir Bychkov, CEO of Global Ports Management, commented:

"During the first six months of 2018, I am pleased to report that Global Ports' container volume growth has outpaced the double digit growth of the Russian container market. This strong performance, coupled with the substantial 25.6% increase in non-container cargo handling revenue, has resulted in healthy revenue growth for the Group. These results demonstrate that our strategy to better utilise our assets is proving highly successful with non-container revenue now accounting for more than a quarter of the Group's consolidated revenue.

Over the period we have remained focused on cost control, which has supported an increase in both Adjusted EBITDA and Adjusted EBITDA margin. We generated strong free cash flow and continued to deleverage reducing Net Debt to Adjusted EBITDA to 3.9x, its lowest level since 2015.

In the current macroeconomic and competitive environment we will remain focused on driving operational excellence as well as expanding cargo volumes across the Group. We will also carefully consider potential organic growth opportunities in bulk cargo to further improve the utilisation of our asset base.

My core priority as CEO is to leverage the extensive experience and deep industry knowledge of the management team and our co-controlling shareholders as we seek to take advantage of the opportunities offered by the under-containerised Russian market."

Further information is available in the following Appendices:

●       Appendix 1: Results of operations for Global Ports for the six months ended 30 June 2018;

●       Appendix 2: Reconciliation of Additional data (non-IFRS) to the Consolidated Financial Information;

●       Appendix 3: Definitions and Presentation of Information;

●       Appendix 4: Investor Presentation. http://www.rns-pdf.londonstockexchange.com/rns/8100Z_2-2018-9-5.pdf

Other

Pursuant to Article 2.1(i) (ii) of the Transparency Directive (2004/109/EC) and Rule 6.4.2 of the Disclosure and Transparency Rules of the UK Financial Services Authority, the Company confirms that it has chosen the United Kingdom as its Home State.

Downloads

The interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2018 for Global Ports is available for viewing and downloading at http://www.globalports.com/globalports/investors/reporting-transactions/annual-interim-results.

 

 

Analyst and Investor Conference call

The publication of these results will be accompanied by an analyst and investor conference call hosted by:

·      Vladimir Bychkov, Chief Executive Officer, Global Ports Management LLC;

·      Alexander Roslavtsev, Chief Financial Officer, Global Ports Management LLC;

·      Brian Bitsch, Chief Commercial Officer, Global Ports Management LLC;

·      Andrei Bubnov, Director for Strategy and Development, Global Ports Management LLC;

·      Arnout Dirk Lugtmeijer, General Manager of Vopak E.O.S.;

·      Dirk van Assendelft, General Manager of Multi-Link Terminals;

·      Alexander Iodchin, Managing Director of Global Ports Investments PLC.

Date: Wednesday, 5 September 2018

Time: 13.00 UK / 9.00 US (east coast) / 16.00 Moscow

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

Standard International Access: +44 (0) 20 3003 2666

UK Toll Free: 0808 109 0700

USA Toll Free: +1 866 966 5335

Russia Toll Free: 8 10 8002 4902044

ENQUIRIES

Global Ports Investor Relations

Mikhail Grigoriev / Tatiana Khansuvarova

+357 25 313 475

+7 916 991 73 96

Email: [email protected]

Global Ports Media Relations

Anna Vostrukhova

+357 25 313 475

E-mail: [email protected] 

Teneo Blue Rubicon

Zoë Watt / Douglas Campbell

+44 20 7260 2700

E-mail: [email protected]

 

 

NOTES TO EDITORS

Global Ports Investments PLC

Global Ports Investments PLC is the leading operator of container terminals in the Russian market.

Global Ports' terminals are located in the Baltic and Far East Basins, key regions for foreign trade cargo flows. Global Ports operates five container terminals in Russia (Petrolesport, First Container Terminal, Ust-Luga Container Terminal[5] and Moby Dik[6] in the Russian Baltics, and Vostochnaya Stevedoring Company in the Russian Far East) and two container terminals in Finland[7] (Multi-Link Terminals in Helsinki and Kotka). Global Ports also owns inland container terminals Yanino Logistics Park[8] located in the vicinity of St. Petersburg, and has a 50% stake in the major oil products terminal Vopak E.O.S.9 in Estonia.

Global Ports' revenue for the first half of 2018 was USD 175.3 million and Adjusted EBITDA was USD 108.7 million*. Consolidated Marine Container Throughput was 681 thousand TEU in the first half 2018.

Global Ports' major shareholders are Delo Group, one of the largest private transportation and logistics holding companies in Russia (30.75%), and APM Terminals B.V. (30.75%), whose core expertise is the design, construction, management and operation of ports, terminals and inland services. APM Terminals operates a global terminal network of 74 ports and 117 inland services facilities, giving the company a global presence in 58 countries. 20.5% of Global Ports shares are traded in the form of global depositary receipts listed on the Main Market of the London Stock Exchange (LSE ticker: GLPR).

For more information please see: www.globalports.com

 

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. Global Ports wishes to caution you that these statements are only predictions and that actual events or results may differ materially. Global Ports 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 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.

 

 

 

Appendix 1: Results of operations for Global Ports for the six months ended 30 June 2018

The financial information presented in this appendix is extracted from the Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2018, prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"). This appendix also includes certain non-IFRS financial information, identified using capitalised terms below. For further information on the calculation of such non-IFRS financial information, see Appendix 3 (Definitions and Presentation of Information) and the section entitled "Non-IFRS Measures: Adjusted EBITDA and Adjusted EBITDA Margin" below. Readers of this appendix should read the entire announcement together with the Global Ports Group Condensed Consolidated Financial Information (unaudited) also released on the date hereof, and not just rely on the summary information set out below.

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

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

 

Operating Information

 

The table below sets out the container and bulk cargo throughput of the Group's terminals for the periods indicated. Gross throughput is shown on a 100% basis for each terminal, including terminals held through joint ventures and accounted for using the equity method.

 

 

1H 2018

1H 2017

Change

 

 

 

Absolute

%

Marine Terminals

 

 

 

 

Containerised cargo (thousand TEUs)

 

 

 

 

PLP

137.3

114.0

23.3

20.5%

VSC

202.4

174.4

28.1

16.1%

FCT

302.4

263.8

38.7

14.7%

ULCT

38.7

35.3

3.4

9.6%

 

 

 

 

 

Non-containerised cargo

 

 

 

 

Ro-ro (thousand units)

10.6

10.7

(0.1)

(1.3%)

Cars (thousand units)

59.9

38.2

21.7

56.8%

Other bulk cargo (thousand tonnes)

1 613.5

1 331.8

281.7

21.2%

 

 

 

 

 

Inland Terminal

 

 

 

 

LT

 

 

 

 

Containerised cargo (thousand TEUs)

89.6

87.6

2.1

2.4%

Bulk cargo throughput (thousand tonnes)

175

174.5

0.2

0.1%

 

 

 

 

 

Consolidated marine container throughput

680.8

587.4

93.4

15.9%

Consolidated inland container throughput

89.6

87.6

2.1

2.4%

Consolidated marine bulk troughput

1 596.9

1 313.4

283.4

21.6%

Consolidated inland bulk troughput

174.7

174.5

0.2

0.1%

 

 

 

 

 

Operational statistics of joint ventures

 

 

 

 

 

 

 

 

 

Containerised cargo (thousand TEUs)

 

 

 

 

Moby Dik

57.7

82.6

(24.9)

(30.2%)

Finnish Ports

52.0

61.0

(9.0)

(14.8%)

 

 

 

 

 

Non-containerised cargo

 

 

 

 

VEOS (million tonnes)

1.3

1.3

0.0

1.4%

 

 

 

 

 

Inland Terminal

 

 

 

 

Yanino

 

 

 

 

Containerised cargo (thousand TEUs)

62.3

55.6

6.7

12.0%

Bulk cargo throughput (thousand tonnes)

286.7

267.2

19.5

7.3%

 

The Russian container market continued its recovery in the first half of 2018 rising 11.8% y-o‑y driven by a strong increase in the handling of laden import containers. Throughput of laden export containers at Russian terminals also continued to grow rapidly (+13.4% y-o-y), mainly due to increased exports and the wider use of containers in Russia. Laden export have risen 55% since 2013 as increased containerisation of export supply chains has resulted in a reduction in supply chain inefficiencies, more flexibility and the ability to market small quantities (as little as one container) globally.

 

Overall marine container throughput at Russian terminals reached 2.43 million TEU in the first six months of 2018 compared to 2.17 million TEU for the first half of 2017. Average container handling capacity utilisation[9] for the market improved to approximately 60% in the first half of 2018 compared to 54% in the first half of 2017.

 

Container throughput in the Far East demonstrated even higher growth rates of 14.0% y‑o-y. The growth in container throughput at the terminals in Saint-Petersburg and the surrounding area accelerated to 14.1% due to cost advantages and increased vessel capacity. Container throughput at the Russian South basin (+6.7% y-o-y) lagged the market due to inland infrastructure bottlenecks and reduced cost advantages.

 

The Group's Consolidated Marine Container Throughput increased 15.9% to 681 thousand TEU in the first half of 2018 compared to 587 thousand TEU in the same period of 2017. The overall growth rate of the Group's Consolidated Marine Container Throughput outpaced that of the Russian container market.

The Group continued to focus on increasing bulk cargo volumes to improve utilisation rates at its terminals. As a result, Consolidated Marine Bulk Throughput increased by 21.6% (283 thousand tonnes) to 1,597 thousand tonnes. The growth in Consolidated Marine Bulk Throughput was primarily driven by the growth in export coal handling at VSC and an increase in metal and other export bulk cargo handling at PLP.

 

In response to the strong demand for its coal handling services, the Group increased its coal handling capacity at VSC during 2017. Although it has already reached planned utilisation levels, the Group has no current plans to further increase coal capacity at VSC given the strong recovery of the container market.

 

Traditional Ro-Ro[10] handling was broadly flat (-1.3%) at 10.6 thousand units during the first half of 2018.

 

The Group's passenger car handling volumes increased by 57% from 38 thousand units in the first half of 2017 to 60 thousand units in the first half of 2018. The key drivers of this growth are an overall increase in car imports into Russia growth in the export of cars produced in Russia, underpinned by the growth in the Groups' clients' market share in car imports and exports, which were enabled following investments made by PLP to upgrade the car handling terminal and related services.

 

 

 

Results of operations of Global Ports for the six month period ended 30 June 2018 and 2017.

 

The following table sets out the principal components of the Group's interim condensed consolidated income statement and certain additional non-IFRS data of the Group for the six months ended 30 June 2017 and 2018.

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Selected consolidated financial information

 

 

 

 

Revenue

175.3

162.5

12.9

7.9%

Cost of sales

(70.7)

(79.9)

9.3

(11.6%)

Gross profit

104.7

82.5

22.1

26.8%

Administrative, selling and marketing expenses

(21.1)

(22.6)

1.5

(6.8%)

Share of profit/(loss) of joint ventures accounted for using the equity method

1.7

(10.1)

11.8

(116.9%)

Other gains/(losses)-net

4.8

(35.8)

40.6

(113.5%)

Operating profit

90.2

14.1

76.1

540.3%

Finance income

1.2

0.8

0.4

53.0%

Finance costs

(43.9)

(45.8)

2.0

(4.3%)

Change in fair value of derivative

(8.7)

18.9

(27.7)

(146.3%)

Net foreign exchange gains/(losses) on financial activities

(39.0)

15.1

(54.0)

(358.3%)

Finance income/(costs) - net

(90.3)

(11.0)

(79.3)

717.8%

Profit/(loss) before income tax

(0.2)

3.0

(3.2)

(106.0%)

Income tax expense

(3.1)

(14.9)

11.8

(79.2%)

Profit/(loss) for the period

(3.3)

(11.9)

8.6

(72.4%)

Attributable to:

 

 

 

 

Owners of the Company

(3.8)

(12.1)

8.3

(68.9%)

Non-controlling interest

0.5

0.2

0.3

175.7%

 

 

 

 

 

Key non-IFRS financial information

 

 

 

 

Gross profit adjusted for impairment

104.7*

93.9*

10.7

11.4%

Gross profit margin (Adjusted for Impairment)

59.7%*

57.8%*

 

 

Adjusted EBITDA

108.7*

97.3*

11.5

11.8%

Adjusted EBITDA Margin

62.0%*

59.9%*

 

 

Cost of sales adjusted for impairment

(70.7)*

(68.5)*

(2.1)

3.1%

Cash Cost of Sales

(46.3)*

(43.2)*

(3.1)

7.1%

Total Operating Cash Costs

(66.6)*

(65.2)*

(1.4)

2.2%

Operating profit adjusted for impairment

90.2*

25.5*

64.7

253.8%

Profit/(loss) for the period adjusted for impairment

(3.3)*

(0.5)*

(2.8)

584.6%

Free Cash Flow

72.7*

70.3*

2.3

3.3%

 

Revenue

 

The following table sets forth the components of the consolidated Revenue for the first six months of 2018 and 2017.

 

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Container handling

129.9*

126.3*

3.6

2.9%

Other

45.4*

36.2*

9.2

25.6%

Total revenue

175.3

162.5

12.9

7.9%

 

In the first half of 2018 revenue increased by 7.9% to USD 175.3 million from USD 162.5 million in the first half of 2017 driven by higher revenue from container handling and other revenue.

 

Revenue from container handling increased 2.9%, or USD 3.6 million, to USD 129.9 million*. This was driven by an increase in Consolidated Container Throughput of 15.9% that was partially offset by an 11.2%* decrease in consolidated Revenue per TEU. Only a low single digit percentage of the reduction in Revenue per TEU was attributable to change in tariffs, and the remainder is largely attributable to lower share of imports and the change in customer and service mix.

 

Other revenue increased by 25.6%, or USD 9.2 million, to USD 45.4 million*, driven by growth in coal and other bulk cargo handling revenue.

 

The share of non-container revenue in consolidated revenue of the Group increased from 22.3%* in the first half 2017 to 25.9%* in the first half of 2018.

 

Cost of sales

 

The following table sets out a breakdown by expense of the Cost of sales for the first half of 2018 and 2017:

 

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Depreciation of property, plant and equipment

17.7

18.8

(1.1)

(6.0%)

Amortisation of intangible assets

6.7

6.5

0.2

2.8%

Impairment of property, plant and equipment and intangible assets

-

11.4

(11.4)

(100.0%)

Staff costs

22.3

21.8

0.6

2.6%

Transportation expenses

4.4

4.1

0.4

9.4%

Fuel, electricity and gas

4.7

3.8

0.9

24.6%

Repair and maintenance of property, plant and equipment

3.2

3.2

(0.1)

(1.6%)

Purchased services

4.1

3.2

0.9

27.5%

Taxes other than on income

2.5

2.3

0.2

9.1%

Other operating expenses

5.1

4.9

0.2

3.3%

Total Cost of sales

70.7

79.9

(9.3)

(11.6%)

Cash Cost of Sales

46.3

43.2

3.1

7.1%

 

Cost of sales decreased by USD 9.3 million, or 11.6%, from USD 79.9 million in the first half of 2017 to USD 70.7 million in the first half of 2018. The decline was primarily driven by a non-cash property, plant and equipment impairment charge of USD 11.4 million incurred in the first half of 2017 in relation to LT[11].

 

Cash Cost of Sales increased by only 7.1% from USD 43.2 million* in the first half 2017 to USD 46.3  million* in the first half of 2018 due to the double-digit growth in throughput in both container and bulk cargo handling combined with the 2.1% inflation rate in Russia over the six month period. The change in cost items such as Fuel, Electricity and Gas, Purchased services and Transportation expenses is directly linked to the change in volumes of cargo handling.

 

Gross profit

 

Gross profit increased by USD 22.1 million, or 26.8%, from USD 82.5 million in the first half of 2017 to USD 104.7 million in the first half of 2018. This increase was due to similar factors described above.

Administrative, selling and marketing expenses

 

Administrative, selling and marketing expenses decreased by USD 1.5 million, or 6.8%, from USD 22.6 million in the first half of 2017 to USD 21.1 million in the first half of 2018. This was primarily due to a decrease of USD 1.6 million, or 11%, in Staff costs due to the depreciation of the Russian rouble and cost optimisation.

 

Adjusted EBITDA and Adjusted EBITDA margin

 

Adjusted EBITDA in the first half of 2018 increased 11.8% or USD 11.5 million to USD 108.7 million* from USD 97.3 million* in the first half of 2017 mainly due to the growth in throughput and strict control over cash costs. Adjusted EBITDA margin improved by 213 basis points from 59.9% in the first half of 2017 to 62.0%* in the first half of 2018.

 

Share of profit/(loss) of joint ventures accounted for using the equity method

 

The Group's share of profit from joint ventures in the first half of 2018 was USD 1.7 million versus a loss of 10.1 million in the first half of 2017. The loss in 2017 was principally due to unfavourable results from Vopak E.O.S (Estonia), which in turn were due to a structural deterioration in the business environment in which the terminal operates, which is heavily dependent on the exports of Russian oil products. As a result, the Group took USD 10.6 million of impairment charge on its investment in the first half of 2017.

 

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

VEOS

0.3

(12.1)

12.4

(102.8%)

MLT

2.8

2.4

0.4

15.6%

CD Holding

(1.4)

(0.5)

(0.9)

193.3%

Total share of profit of joint ventures

1.7

(10.1)

11.8

(116.9%)

 

Other gains/(losses)-net

 

Other gains/(losses) amounted to a net gain of USD 4.8 million in the first half of 2018, compared to a loss of USD 35.8 million in the first half of 2017. The 1H 2017 result was impacted by a loss relating to the recycling of derivative losses previously recognised through Other comprehensive income of USD 35.5 million. The nature of this loss is linked to the acquisition of NCC at the end of 2013, following which the Group designated an acquired derivative as a cash flow hedge instrument on one of NCC's loans. At the end of 2015 the Group partly restructured its debt portfolio. In the course of the restructuring, this loan was terminated. This then resulted in the termination of the cross-currency interest rate swap arrangement outlined above. The termination of the cross-currency interest rate swap arrangement together with the settlement of the related loan led to the cancellation of the related cash flow hedge and non-cash loss recycling in the Group's consolidated income statement during the contractual maturity of the settled loan. As of 31 December 2017, the loss was recycled in full.

 

In 2018 the Group disposed of subsidiary with net liabilities of USD 0.94 million for a cash consideration of USD 0.86 million. The main asset of the subsidiary was loading equipment. The transaction did not have any adverse effect on the operations of the Group. The transaction resulted in an overall gain of USD 4.6 million booked within 'Other gains/(losses) - net', comprising a USD 1.8 million gain from sale of the subsidiary and USD 2.8 million of foreign translation differences that were reclassified from the translation reserve to the income statement.

 

Operating profit/(loss)

 

The Group's operating profit increased by USD 76.1 million from USD 14.1 million in the first half of 2017 to USD 90.2 million in the first half of 2018 due to the factors described above.

 

 

Finance income/(costs)-net

 

Finance income/(costs) -net increased from a cost of USD 11.0 USD million in the first half of 2017 to a cost of USD 90.3 million in the first half of 2018. This move was primarily due to the foreign exchange gain from financing activities of USD 15.1 million in the first half of 2017 reducing to a loss of USD 39.0 million in the first half of 2018. This was a result of a depreciation of the Russian rouble, which in turn led to a change from the gain to loss on revaluation of US dollar-denominated borrowings in the Group's Russian subsidiaries. Further, the change in fair value of derivative instruments[12] turned from a profit of USD 18.9 million in the first half of 2017 to a loss of USD 8.7 million in the first half of 2018, which contributed to the movement in finance income/(costs) - net.

 

Profit/(loss) before income tax

 

Profit/(loss) before income tax changed from a profit of USD 3.0 million in the first half of 2017 to a loss of USD 0.2 million in the first half of 2018 due to the factors described above.

 

Income tax expense

 

In the first half of 2018, the income tax expense was USD 3.1 million, compared to USD 14.9 million in the first half of 2017. The difference in the effective tax rate from the normally applicable Russian statutory tax rate of 20% was largely driven by the impact of expenses and losses not deductible for tax purposes, withholding tax on undistributed profits and non‑taxable results of joint ventures.

 

Profit/(loss) for the period

 

The company reported a loss of USD 3.3 million in the first half of 2018 compared to a loss of USD 11.9 million in the first half of 2017 due to the factors described above.

 

Liquidity and capital resources

 

General

 

As at 30 June 2018, the Group had USD 125.9 million in cash and cash equivalents.

The Group's liquidity requirements arise primarily in connection with repayments of principal and interest payments, capital investment programmes and ongoing operating costs of its operations. In the first half of 2018 the Group's liquidity needs were met primarily by cash flows generated from its operating activities. The Group expects to fund its liquidity requirements in both the short and medium term with cash generated from operating activities and borrowings.

As a result of the shareholding or joint venture agreements at Moby Dik, the Finnish Ports, Yanino and Vopak E.O.S., the cash generated from the operating activities of each of the entities in those businesses is not freely available to fund the other operations and capital expenditures of the Group or any other businesses within the Group and can only be lent to an entity or distributed as a dividend with the consent of the other shareholders to those arrangements.

As of 30 June 2018, the Group had USD 953.3 million* of total borrowings[13], of which USD 49.3 million* comprised current borrowings and USD 904.0 million* comprised non‑current borrowings. As at 30 June 2018, the Group had no undrawn borrowing facilities. See also "Capital resources".

Cash flows

 

The following table sets out the principal components of the Group's consolidated cash flow statement for the first half of 2018 and 2017:

 

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Cash generated from operations

101.1

94.4

6.7

7.1%

Tax paid

(16.6)

(24.7)

8.1

32.7%

Dividends received from joint ventures

1.7

8.5

(6.8)

(79.7%)

Net cash from operating activities

86.2

78.2

8.0

10.2%

Purchases of intangible assets

(0.1)

(0.5)

0.5

88.8%

Purchases of property, plant and equipment

(13.5)

(7.9)

(5.7)

72.0%

Proceeds from sale of property, plant and equipment

0.1

0.2

(0.1)

(49.8%)

Loans granted to related parties

(1.4)

(7.5)

6.1

(81.3%)

Loan repayments received from related parties

0.3

1.0

(0.8)

(75.2%)

Disposal of subsidiary

0.9

-

0.9

-

Interest received

0.8

0.6

0.2

39.5%

Net cash used in investing activities

(13.0)

(14.1)

1.1

7.9%

Repayments of borrowings

(43.0)

(31.7)

(11.3)

35.8%

Interest paid

(43.1)

(45.2)

2.0

(4.5%)

Proceeds from derivative financial instruments

9.9

10.3

(0.4)

(3.9%)

Finance lease principal payments (third parties)

(0.8)

(1.3)

0.5

(35.5%)

Net cash used in financing activities

(77.1)

(67.8)

(9.3)

(13.6%)

Net increase/(decrease) in cash and cash equivalents

(3.8)

(3.7)

(0.1)

3.9%

Cash and cash equivalents at beginning of the period

130.4

119.3

11.2

9.4%

Exchange gains/(losses) on cash and cash equivalents 

(0.8)

0.4

(1.1)

(313.9%)

Cash and cash equivalents at end of the period

125.9

115.9

9.9

8.5%

Free Cash Flow (Net cash from operating activities - Purchase of PPE)

72.7*

70.3*

2.3

3.3%

 

Net cash from operating activities

 

Net cash from operating activities increased by USD 8.0 million, or 10.2%, from USD 78.2 million in the first half of 2017, to USD 86.2 million in the first half of 2018. Growth in net cash from operating activities was primarily due to a USD 6.7 million, or 7.1%, increase in the cash generated from operations, due to the growth in Revenue and Adjusted EBITDA described above. This growth in Cash generated from operations was partially offset by the USD 6.8 million or 79.7% decrease in Dividends received from joint ventures due to a reduced dividend payment from Moby Dik and as a result of the elevated dividend that had been declared and by VEOS previously and paid in 1H 2017.

Net cash used in investing activities

 

Net cash used in investing activities decreased by USD 1.1 million, or 7.9%, from USD 14.1 million in the first half of 2017 to USD 13.0 million in the first half of 2018. The USD 6.1 million decrease in Loans granted to related parties which are primarily related to the Group's joint venture, Yanino Logistics Park (YLP), was partially offset by the USD 5.7 million growth in Purchase of property, plant and equipment.

 

The increase in Purchases of property, plant and equipment was in line with the mid-term CAPEX guidance of USD 25-35 million per annum. The Group's modern and well-invested terminals allow for limited capital investments without compromising on the efficiency and safety of the operations. Capital expenditure in the period was focused on planned maintenance projects, the scheduled upgrade of existing container handling equipment (replacement of container straddle carries at FCT to improve both efficiency of operations and level of service) and coal handling equipment at VSC as well as environmental protection measures undertaken in relation to coal handling.

 

Net cash used in financing activities

 

Net cash used in financing activities increased by USD 9.3 million, or 13.6%, from USD 67.8 million in the first half of 2017 to USD 77.1 million the first half of 2018 due to an increased repayment of borrowings to USD 43.0 million in the first half 2018 as the Group prepaid a bilateral bank loan of USD 21.5 million* in June 2018.

 

The Groups cash outflows related to the servicing of debt (calculated as net of Interest paid and Proceeds from derivative financial instruments) amounted to USD 33.2 million in the first half of 2018 which was 4.7% or USD 1.6 million* lower than in the first half of 2017 (USD 34.9 million) due to the decrease in total debt described above.

 

Capital resources

 

The Group's financial indebtedness consists of bank borrowings, bonds, loans from third parties, finance leases liabilities and net derivative financial instruments and reached USD 953.3 million* as at 30 June 2018. As of that date, all of the Group's borrowings were secured by equity interests in certain Group members or by guarantees and suretyships granted by certain Group members. Certain of these borrowings contain covenants requiring the Group and the borrower to maintain specific indebtedness to Adjusted EBITDA and other ratios, as well as covenants having the effect of restricting the ability of the borrower to transfer assets, make loans and pay dividends to other members of the Group.

 

The weighted average interest rate of the Group's debt portfolio is 6.8%*, including the effects of swap arrangements.

 

As at 30 June 2018, the Group had leverage of Net debt to LTM Adjusted EBITDA ratio of 3.9x* (compared to a ratio of 4.3x* as at 31 December 2017 and 4.2* as at 31 December 2016).

The following table sets out the maturity profile of the Group's total borrowings (including finance leases) and net derivative financial instruments as at 30 June 2018.

 

USD mln

2H 2018

                    36.3*

2019

                      5.0*

2020

                    61.3*

2021

                  148.1*

2022 and after

                  702.7*

Total

953.3*

As at 30 June 2018, the carrying amounts of the Group's borrowings (not including effect of derivative financial instruments) were denominated in the following currencies:

 

USD mln

Rouble

                  253.9

US dollar

                  753.8

Total

               1,007.7

As at 30 June 2018, the carrying amounts of a majority of the Group's borrowings denominated in Russian roubles, in the amount of USD 245.1 million, were swapped into US dollars.

 

 

Appendix 2: Reconciliation of Additional data (non-IFRS) to the interim condensed consolidated financial information for the six month period ended 30 June 2018

 

Reconciliation of Adjusted EBITDA to Profit for the period

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Profit for the year

(3.3)

(11.9)

8.6

(72.4%)

Adjusted for

 

 

 

 

Income tax expense

3.1

14.9

(11.8)

(79.2%)

Finance costs-net

90.3

11.0

79.3

717.7%

Amortisation of intangible assets

6.7

6.5

0.2

2.8%

Depreciation of property, plant and equipment

18.4

19.4

(1.0)

(5.1%)

Impairment of goodwill and property, plant and equipment

-

11.4

(11.4)

-

Other gains/(losses)-net

(4.8)

35.8

(40.6)

(113.5%)

Share of profit/(loss) of joint ventures accounted for using the equity method

(1.7)

10.1

(11.8)

(116.9%)

Adjusted EBITDA*

108.7

97.3

11.5

11.8%

 

 

Reconciliation of Adjusted EBITDA Margin

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Revenue

175.3

162.5

12.9

7.9%

Adjusted EBITDA*

108.7

97.3

11.5

11.8%

Adjusted EBITDA Margin*

62.0%

59.9%

 

 

 

 

Reconciliation of Total Operating Cash Costs to Cost of sales and administrative, selling and marketing expenses

 

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

%

Cost of sales

70.7

79.9

(9.3)

(11.6%)

Administrative, selling and marketing expenses

21.1

22.6

(1.5)

(6.8%)

Total

91.7

102.5

(10.8)

(10.5%)

Adjusted for

 

 

 

 

Impairment of property, plant and equipment

-

(11.4)

11.4

-

Depreciation of property, plant and equipment

(18.4)

(19.4)

1.0

(5.1%)

Amortisation of intangible assets

(6.7)

(6.5)

(0.2)

2.8%

Total Operating Cash Costs*

66.6

65.2

1.4

2.2%

 

 

 

Reconciliation of Cash Costs of Sales to Cost of sales

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Cost of sales

70.7

79.9

(9.3)

(11.6%)

Adjusted for

 

 

 

 

Impairment of property, plant and equipment

-

(11.4)

11.4

-

Depreciation of property, plant and equipment

(17.7)

(18.8)

1.1

(6.0%)

Amortisation of intangible assets

(6.7)

(6.5)

(0.2)

2.8%

Cash Cost of Sales*

46.3

43.2

3.1

7.1%

 

Reconciliation of Cash Administrative, Selling and Marketing Expenses to Administrative, selling and marketing expenses

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Administrative, selling and marketing expenses

21.1

22.6

(1.5)

(6.8%)

Adjusted for

 

 

 

 

Depreciation of property, plant and equipment

(0.7)

(0.6)

(0.1)

20.9%

Amortisation of intangible assets

(0.02)

(0.02)

(0.00)

16.4%

Cash Administrative, Selling and Marketing expenses*

20.3

22.0

(1.7)

(7.5%)

 

Reconciliation of Net Debt and Total Debt to borrowings

 

As at 30.06.2018

As at 31.12.2017

Change

 

USD mln

USD mln

USD mln

%

Non-current Borrowings

941.3

1 005.7

(64.3)

(6.4%)

Current Borrowings

66.3

69.1

(2.8)

(4.0%)

Adjusted for

 

 

 

 

Derivative financial instruments (non-current assets)

(37.4)

(58.8)

21.5

(36.5%)

Derivative financial instruments (current assets)

(17.0)

(19.5)

2.5

(12.9%)

Total Debt*

953.3

996.4

(43.1)

(4.3%)

Adjusted for

 

 

 

 

Cash and cash equivalents

(125.9)

(130.4)

4.6

(3.5%)

Net Debt*

827.4

865.9

(38.5)

(4.4%)

 

 

Reconciliation of Free Cash Flow to Net cash from operating activities

 

1H 2018

1H 2017

Change

 

USD mln

USD mln

USD mln

%

Net cash from operating activities

86.2

78.2

8.0

10.2%

Adjusted for

 

 

 

 

Purchases of property, plant and equipment

(13.5)

(7.9)

(5.7)

72.0%

Free Cash Flow*

72.7

70.3

2.3

3.3%

 

 

Appendix 3: Definitions and Presentation of Information

DEFINITIONS

Terms that require definitions are marked with capital letters in this announcement and the definitions of which are provided below in alphabetical order. The non-IFRS financial measures defined below are presented as supplemental measures of the Group's operating performance, which the Group uses as key performance indicators of the Group's business and to provide a supplemental tool to assist in evaluating current business performance. The Group believes these metrics are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Russian market and global ports sector. These non-IFRS financial measures are measures of the Group's operating performance that are not required by, or prepared in accordance with, IFRS. All of these non-IFRS financial measures have limitations as analytical tools, and investors should not consider any one of them in isolation, or any combination of them together, as a substitute for analysis of the Group's operating results as reported under IFRS and should not be considered as alternatives to revenues, profit, operating profit, or any other measures of performance derived in accordance with IFRS or as alternatives to cash flow from operating activities or as measures of the Group's liquidity. In particular, the non-IFRS financial measures should not be considered as measures of discretionary cash available to the Group businesses.

 

Adjusted EBITDA (a non-IFRS financial measure) for Global Ports Group is defined as profit for the period before income tax expense, finance (income)/costs-net, depreciation of property, plant and equipment, amortisation of intangible assets, share of profit/(loss) of joint ventures accounted for using the equity method, other gains/(losses)-net and impairment of goodwill and property, plant and equipment and intangible assets.

Adjusted LTM EBITDA (a non-IFRS financial measure) is Adjusted EBITDA for the last twelve months, calculated as a sum of Adjusted EBITDA for the first half of 2018 and Adjusted EBITDA for the second half of 2017. 

Adjusted EBITDA Margin (a non-IFRS financial measure) is calculated as Adjusted EBITDA divided by revenue, expressed as a percentage. 

Average Storage Capacity is a storage capacity available at Vopak E.O.S. oil products terminals, averaged for the beginning and end of the year.

Baltic Sea Basin is the geographic region of northwest Russia, Estonia and Finland surrounding the Gulf of Finland on the eastern Baltic Sea, including St. Petersburg, Ust-Luga, Tallinn, Helsinki and Kotka.

Cash Costs of Sales (a non-IFRS financial measure) are defined as cost of sales, adjusted for depreciation and impairment of property, plant and equipment, amortisation and impairment of intangible assets.

Cash Administrative, Selling and Marketing Expenses (a non-IFRS financial measure) are defined as administrative, selling and marketing expenses, adjusted for depreciation and impairment of property, plant and equipment, amortisation and impairment of intangible assets.

CD Holding group consists of Yanino Logistics Park (an inland terminal in the vicinity of St. Petersburg), CD Holding and some other entities. The results of CD Holding group are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below Adjusted EBITDA).

Consolidated Inland Bulk Throughput is defined as combined bulk throughput by consolidated inland terminals: LT.

Consolidated Inland Container Throughput is defined as combined container throughput by consolidated inland terminals: LT.

Consolidated Marine Bulk Throughput is defined as combined marine bulk throughput by consolidated terminals: PLP, VSC, FCT and ULCT.

Consolidated Marine Container Throughput is defined as combined marine container throughput by consolidated marine terminals: PLP, VSC, FCT and ULCT.

Container Throughput in the Russian Federation Ports is defined as total container throughput of the ports located in the Russian Federation, excluding half of cabotage cargo volumes. Respective information is sourced from ASOP ("Association of Sea Commercial Ports", www.morport.com).

Far East Basin is the geographic region of southeast Russia, surrounding the Peter the Great Gulf, including Vladivostok and the Nakhodka Gulf, including Nakhodka on the Sea of Japan.

First Container Terminal (FCT) is located in the St. Petersburg harbour, Russia's primary gateway for container cargo and is one of the first specialised container terminals to be established in the USSR. The Global Ports Group owns a 100% effective ownership interest in FCT. The results of FCT are fully consolidated.

Finnish Ports segment consists of two terminals in Finland, MLT Kotka and MLT Helsinki (in the port of Vuosaari), in each of which Container Finance currently has a 25% effective ownership interest. The results of the Finnish Ports segment are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Free Cash Flow (a non-IFRS financial measure) is calculated as Net cash from operating activities less Purchase of PPE.

Functional Currency is defined as the currency of the primary economic environment in which the entity operates. The functional currency of the Company and certain other entities in the Global Ports Group is US dollars. The functional currency of the Global Ports Group's operating companies for the years under review was (a) for the Russian Ports segment, the Russian rouble, (b) for Oil Products Terminal segment, and for the Finnish Ports segment, the Euro.

Gross Container Throughput represents total container throughput of a Group's terminal or a Group's operating segment shown on a 100% basis. For the Russian Ports segment it excludes the container throughput of the Group's inland container terminals - Yanino and Logistika Terminal.

Logistika Terminal (LT) is an inland container terminal providing a comprehensive range of container freight station and dry port services at one location. The terminal is located to the side of the St. Petersburg - Moscow road, approximately 17 kilometres from FCT and operates in the Shushary industrial cluster. In September 2018 the Group completed the previously announced[14] sale of its holding in JSC «Logistika-Terminal» ("LT"), one of the Group's two inland terminals, to PJSC TransContainer for a consideration of 1.9 billion Russian roubles

MLT Group consists of Moby Dik (a terminal in the vicinity of St. Petersburg) and Multi-Link Terminals Oy (terminal operator in Vuosaari (near Helsinki, Finland) and Kotka, Finland). The results of MLT group are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Moby Dik (MD) is located on the St. Petersburg ring road, approximately 30 kilometers from St. Petersburg, at the entry point of the St. Petersburg channel. It is the only container terminal in Kronstadt. The Global Ports Group owns a 75% effective ownership interest in MD, Container Finance LTD currently has a 25% effective ownership interest. The results of MD are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Net Debt (a non-IFRS financial measure) is defined as a sum of current borrowings and non-current borrowings, derivative financial instruments less cash and cash equivalents and bank deposits with maturity over 90 days.

Oil Products Terminal segment consists of the Group's 50% ownership interest in Vopak E.O.S. (in which Royal Vopak currently has a 50% effective ownership interest). The results of the Oil Products Terminal segment are consolidated in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Petrolesport (PLP) is located in the St. Petersburg harbour, Russia's primary gateway for container cargo. The Group owns a 100% effective ownership interest in PLP. The results of PLP are fully consolidated.

Ro-Ro, roll on-roll off is cargo that can be driven into the belly of a ship rather than lifted aboard. Includes cars, buses, trucks and other vehicles.

Revenue per TEU is defined as the Global Ports Group's Consolidated container revenue divided by total container marine throughput.

Russian Ports segment consists of the Global Ports Group's interests in PLP (100%), VSC (100%), FCT (100%), ULCT (80%) (in which Eurogate currently has a 20% effective ownership interest), Moby Dik (75%), Yanino (75%) (in each of Moby Dik and Yanino Container Finance currently has a 25% effective ownership interest). The results of Moby Dik and Yanino are accounted in the Global Ports' consolidated financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

TEU is defined as twenty-foot equivalent unit, which is the standard container used worldwide as the uniform measure of container capacity; a TEU is 20 feet (6.06 metres) long and eight feet (2.44 metres) wide and tall.

Total Debt (a non-IFRS financial measure) is defined as a sum of current borrowings, non-current borrowings and derivative financial instruments related to borrowings.

Total Operating Cash Costs (a non-IFRS financial measure) is defined as Global Ports Group's cost of sales, administrative, selling and marketing expenses, less depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Ust Luga Container Terminal (ULCT) is located in the large multi-purpose Ust-Luga port cluster on the Baltic Sea, approximately 100 kilometres westwards from St. Petersburg city ring road. ULCT began operations in December 2011. The Global Ports Group owns an 80% effective ownership interest in ULCT, Eurogate, the international container terminal operator, currently has a 20% effective ownership interest. The results of ULCT are fully consolidated.

Vopak E.O.S. includes AS V.E.O.S. and various other entities (including an intermediate holding) that own and manage an oil products terminal in Muuga port near Tallinn, Estonia. The Group owns a 50% effective ownership interest in Vopak E.O.S.. The remaining 50% ownership interest is held by Royal Vopak. The results of Vopak E.O.S. are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Vostochnaya Stevedoring Company (VSC) is located in the deep-water port of Vostochny near Nakhodka on the Russian Pacific coast, approximately eight kilometers from the Nakhodka-Vostochnaya railway station, which is connected to the Trans-Siberian Railway. The Group owns a 100% effective ownership interest in VSC. The results of VSC are fully consolidated.

Weighted average effective interest rate is the average of interest rates weighted by the share of each loan in the total debt portfolio.

Yanino Logistics Park (YLP) is the first terminal in the Group's inland terminal business and is one of only a few multi-purpose container logistics complexes in Russia providing a comprehensive range of container and logistics services at one location. It is located approximately 70 kilometres from the Moby Dik terminal in Kronstadt and approximately 50 kilometres from PLP. The Global Ports Group owns a 75% effective ownership interest in YLP, Container Finance LTD currently has a 25% effective ownership interest. The results of YLP are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).
 

Appendix 4: Investor Presentation http://www.rns-pdf.londonstockexchange.com/rns/8100Z_2-2018-9-5.pdf

An investor presentation is available at http://www.globalports.com/globalports/investors/reporting-transactions/corporate-presentations

 

[1] Including derivative financial instruments used for hedging of the Group's borrowings.

[2] Management estimate calculated as if effective USD/RUB exchange rate in the first half of 2018 was the same as in the first half of 2017.

[3] Including derivative financial instruments used for economic hedge of the Group's borrowings.

[4] See Group's release dated 16 August 2017.

[5] In which Eurogate currently has a 20% effective ownership interest.

[6] In which Container Finance currently has a 25% effective ownership interest.

[7] In each of which Container Finance currently has a 25% effective ownership interest.

[8] In which Container Finance currently has a 25% effective ownership interest.

9 In which Royal Vopak currently has a 50% effective ownership interest.

[9] Company estimates based on publicly available information and ASOP data.

[10] As traditional Ro-Ro the Group reports number of such units as trucks, semi-trailer trucks, construction and agricultural machinery.

[11] See Global Ports' releases dated 16 August 2017 and 14 March 2018 for details of the Impairment charge recognised in relation to LT.

[12] During 2015 and 2016 the Group entered into three cross-currency swap arrangements to exchange its RUR-denominated liabilities related to the newly issued bonds (3 issues of RUR 5,000 million each) with fixed interest rate of approximately 13% in the amount RUR 15,000 million to USD-denominated debt with the lower fixed interest rate.

[13] Including derivative financial instruments.

[14] See Group's release dated 16 August 2017.


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