Interim Results for the six months ended 30th June 2010

PLC (“Company” together with its consolidated subsidiaries “Globaltrans”, or the “Group”), (LSE ticker: GLTR) today announces interim results for the six months ended 30 June 2010.

In accordance with the Group’s accounting policies, the reported financial and operational results include results of OOO BaltTransServis (“BTS”, acquired in December 2009) for the six months ended 30 June 2009 and 2010. Certain financial information which is derived from the management accounts is marked in this announcement with an asterisk {*}.


As Russia’s leading private freight rail transportation group, Globaltrans’ results for the first half 2010 demonstrated a considerable improvement in profitability over the comparable period, the result of increased business volumes, a better pricing environment and continued strict management of operating costs.

Financial highlights

  • Adjusted Revenue for the period increased to USD 407.5* million, an increase of 28% (16% in Rouble terms) compared to the first half 2009. This performance was driven by improvements in both pricing as well as in Freight Rail Turnover.
  • Average Price per Trip for the period increased by 21% (10% in Rouble terms) to USD 784.5* supported by a recovery in demand.
  • Adjusted EBITDA Margin for the period was 44%* compared to 40%* in the first six months of 2009. Adjusted EBITDA for the period increased by 42% (28% in Rouble terms) to USD 180.4* million.
  • Integration of BTS (acquired in December 2009) was successfully completed. BTS delivered a strong performance in the first six months of 2010 with Adjusted Revenue up by 18% to USD 165.3* million and Adjusted EBITDA increasing by 15% to USD 60.3* million compared to the equivalent period in 2009.
  • Net Profit for the period increased by 122% to USD 95.9 million. Earnings per share increased by 130% to USD 0.46.
  • Net Debt to LTM Adjusted EBITDA ratio stood at a healthy 1.1x* as of 30 June 2010.
  • Foreign currency exchange risk on the Group’s loan book significantly decreased with the share of Rouble-denominated borrowings increased from 36% at the end of 2009 to 52% as of 30 June 2010. Supported by successful placement of debut Rouble bonds by the Group’s Russian subsidiary, the share of Rouble-denominated borrowings increased further to 73%* as of 31 July 2010.

Operational highlights

  • The Group’s Freight Rail Turnover (measured in tonnes-km) increased by 5% in the first half 2010 to 41.9 billion tonnes-km (1H 2009: 39.9 billion tonnes-km), driven by the gondola car operations (increase of 14%). Globaltrans’ Transportation Volumes, measured in tonnes, increased by 10% over the same period.
  • The Group’s Empty Run Ratio for gondola cars improved to 42% from 54% for the same period in 2009 (46% for the full year 2009).
  • Total Fleet of the Group increased by 12% to 41,772 units of rolling stock compared to 37,217 units as at year end 2009, driven by deliveries of new rolling stock and an increase in the leased-in fleet.
  • Deliveries of railcars ordered in the late 2009 are on track with 5,659 units or 87% of ordered railcars delivered as of 31 August 2010. An additional 841 railcars are due for delivery by the end of 2010.
  • The Group’s Average Rolling Stock Operated increased by 14% in the first six months of 2010 to 32,228 units compared to the same period for the previous year.

CEO comment

Sergey Maltsev, CEO of Globaltrans Investment PLC, said:
“The Group delivered another strong trading performance in the first half 2010, boosted by a pick up in demand together with firmer pricing. As a result, Globaltrans posted strong sales growth in the first half with profits and margins recovering to their pre-downturn levels.

The investments we made in expanding the business at the end of last year are already yielding results. BTS produced a strong performance and our investment in new railcars, done at very favourable price levels, has started to deliver good returns. We are maintaining our focus on long-term profitable growth and have launched a new investment programme to purchase railcars which will extend into 2011.

With our excellent customer franchise, modern balanced fleet and strong finances, we are confident that the Group will see further progress during the remainder of the year cementing Globaltrans’ position as Russia’s largest private freight rail transportation group.”

Outlook and strategic update


espite continuing uncertainties about the health of the global economy and the resilience of the recovery, the improvement seen in our markets in the first half is continuing in the second half of the year. We are experiencing gradually increasing freight transport volumes, supported by a stable pricing environment. Current trading supports our confidence that the Group will produce further progress during the rest of the year.

Our corporate strategy continues to be based on three main components (i) pursuing return-oriented expansion, (ii) ensuring a balanced fleet focused on freight rail transportation and (iii) continually improving operational efficiency. In pursuit of our strategy, we expect to acquire an additional 5,000 new railcars between now and the end of 2011. We also expect to increase the number of leased-in railcars within the fleet, as part of our response to the recovery in the freight rail market. We continue to seek acquisition opportunities and remain opportunistic in our approach to M&A activity.

Presentation of information

All financial information presented in this announcement is derived from 30 June 2010 and prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union applicable to Interim Financial Reporting (International Accounting Standard 34 "Interim Financial Reporting"). Certain financial information which is derived from the management accounts and the certain non-GAAP measures (not recognised by IFRS) are marked in this announcement with an asterisk {*}.

In accordance with the Group’s accounting policies, the acquisition of OOO BaltTransServis (“BTS”, acquired in December 2009) has been accounted for as a common control transaction using the predecessor basis of accounting. Under this method financial statement of the acquiree is included in the consolidated financial statements on the assumption that the Group (in such a composition) was in existence for all periods presented, consequently necessary changes have been made to the condensed consolidated interim financial information (unaudited) of Globaltrans Investment PLC for the six months ended 30 June 2009. Therefore all financial and operational information reported for the six months ended 30 June 2009 and 2010 includes financial and operational information for BTS.

The financial information is presented in US Dollars, which the Group’s management believes to be the most useful for readers of the financial statements. The functional currency of the Company and its Russian subsidiaries is the Rouble. The Estonian Subsidiaries have the Estonian Kroon (EEK) as their functional currency. For informational purposes only, changes in certain measures derived from management accounts are presented in Rouble terms in order to illustrate the dynamics of the underlying business.

To better illustrate the changes in the Group’s operational and financial performance during the periods under review, the Group has used and certain operational information, which is derived from management accounts and marked in this announcement with capital letters with definitions provided at the end of this announcement.

Analyst and investor conference call

For replay of an analyst and investor conference call hosted by Sergey Maltsev, Chief Executive Officer and Alexander Shenets, Chief Financial Officer on Tuesday, September 7th, 2010, please click here.

Related materials

Globaltrans Investor Relations

Priit Pedaja
Mikhail Perestyuk
+357 25 503 153

Globaltrans (Globaltrans Investment PLC together with its subsidiaries - "Globaltrans" or "the Group") is the largest privately owned freight rail transportation group with operations in Russia by the size of owned rolling stock fleet (based on publicly available information) and the first and only such group to have an international listing.
Globaltrans Investment PLC is incorporated in Cyprus and has operating subsidiaries in Russia, Ukraine and Estonia. The Group provides freight rail transportation, railcar leasing, and certain ancillary services to clients in Russia, the CIS countries and the Baltics.

As of 30 June 2010 Group’s fleet of rolling stock owned and leased under finance and operating leases amounted to 41,772 units, including 21,626 gondola cars, 19,598 rail tank cars, 58 locomotives and 490 other railcars.

The Group’s Freight Rail Turnover in the first six months of 2010 amounted to 41.9 billion tonnes-km with 28.7 million tonnes of freight transported. In the first six months of 2010 the Group’s Adjusted Revenue amounted to USD 407.5* million with Adjusted EBITDA reaching USD 180.4* million.

Globaltrans' global depositary receipts are listed on the Main Market of the London Stock Exchange under the ticker GLTR since May 2008.  

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