Interim Results for the six months ended 30th June 2011

Globaltrans Investment PLC (“Company” together with its consolidated subsidiaries “Globaltrans” or the “Group”), (LSE ticker: GLTR) today announces its interim results[1] for the six months ended 30 June 2011.

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


Globaltrans, Russia’s leading private freight rail transportation group, achieved a record set of financial results for the first half of 2011. This performance was driven by healthy demand for Globaltrans' services that was successfully converted into revenue growth. Similarly to recent results, Globaltrans again strongly outperformed the Russian freight rail transportation market, increased its overall market share and delivered sizeable growth in all key cargo segments.

Financial highlights

  • Adjusted Revenue for the period increased by 48% period-on-period to USD 603.6* million (1H 2010: USD 407.5* million), supported by increased Freight Rail Turnover and strong pricing;
  • The Group’s EBITDA increased by 52% period-on-period to USD 258.0* million. Adjusted EBITDA increased by 42% period-on-period to USD 256.5* million (1H 2010: USD 180.4* million);
  • Profit for the period increased by 66% period-on-period to USD 159.3 million. Earnings per share[2] increased by 85% period-on-period to USD 0.85 per share;
  • Net Debt decreased by 16% to USD 321.8* million as of 30 June 2011 compared to year end of 2010. Net Debt to LTM Adjusted EBITDA ratio improved to 0.7x* as of 30 June 2011.

 Operational highlights

  • The Group’s Freight Rail Turnover (measured in tonnes-km) increased by 37% period-on-period to 57.5 billion tonnes-km in the first six months of 2011 against overall Russian market growth of 7%[3];
  • The Group’s overall share of Russian freight rail volumes[4] increased to 6.0% in the first six months of 2011 from 5.3% in 2010 (4.9% in 1H 2010) with the major share gains being recorded in metallurgical cargoes, coal and construction materials[5];
  • Average Price per Trip increased by 22% to USD 953.2 (16% in Rouble terms) compared to the same period in 2010. Average Distance of Loaded Trip increased by 8% over the same period. Average Number of Loaded Trips per Railcar decreased by 9% period-on-period;
  • Total Empty Run Ratio improved from 65% in the first six months of 2010 to 62% with Empty Run Ratio for rail tank and hopper cars improving from 112% to 111% and Empty Run Ratio for gondola cars remaining unchanged at 42%. The Share of Empty Run Kilometres Paid by Globaltrans improved falling from 84% in the first six months of 2010 to 77%;
  • The Group’s Average Rolling Stock Operated increased by 38% to 44,395 units in the first six months of 2011 compared to the same period in 2010;
  • The Group’s Total Fleet declined by 2% or 1,185 units to 49,529 units as of 30 June 2011 compared to year end 2010, resulting from an increase of 1,063 units in Owned Fleet offset by a decrease of 2,248 units in the number of leased-in fleet;
  • Opportunistic investment programme continued along with retention of capital discipline. In addition to 2,596 units of rolling stock delivered in the second half of 2010, the Group took delivery of 1,070 units in the first six months of 2011. Any acceleration of the railcar acquisition programme will be subject to increased charges for Globaltrans’ services and/or an improved railcar pricing environment.

CEO comment

Sergey Maltsev, CEO of Globaltrans Investment PLC, said:
“We are extremely pleased with the Group’s performance in the first six months of 2011. The combination of strong customer demand, best-in-class service offerings and premium operating capabilities enabled us to deliver growth across all key market segments and produce a record first half financial performance. These results again illustrate the robustness of our business model both as a source of stability and as a platform for growth in a variety of market conditions.”


Looking forward, and notwithstanding renewed concerns about the state of the global economy, we continue to see good demand from customers for our services.

The second half will feature several rail deregulation milestones. Specifically, the tender for sale of 75 per cent minus 2 shares in Freight One[6] is expected this autumn. We support the decision to put Freight One up for a tender, as it will increase private sector involvement within the Russian freight rail industry positively impacting the whole sector. We are implementing the preparatory steps called for as part of the tender process, including evaluation of different financing options. We are conducting a detailed assessment of the investment opportunity particularly as it would need to satisfy our stringent criteria regarding financial returns and capital discipline. In addition, locomotive traction liberalisation process is proceeding in line with our expectations with the infrastructure tariff having been set in July 2011. Establishment of the relevant legal framework and access regulation is envisaged by the end of 2011, where after we will be in position to prepare our investment plan for the locomotive traction business.

The sector's recent strong outperformance has itself led to a speculative increase in rolling stock prices. As a result, we have temporarily scaled back our opportunistic investment programme. This decision avoids any potential dilution of our returns and enables us to build up a strong funding base whilst retaining the flexibility to step back aggressively into the rail car purchasing market or take advantage of any acquisition opportunities which may arise.

Our balanced fleet, proven outperformance in both rising and falling markets, and strong balance sheet give us a very resilient profile and provides a strong base from which to pursue the type of growth opportunities outlined above.

We remain optimistic about prospects for the second half of the year and our trading performance to date supports this view.


. The Group’s financial performance in the first six months of 2011 was affected by a 5% appreciation of the average exchange rate of the Rouble (Functional Currency of the Company, its Cyprus and Russian subsidiaries) against the US Dollar (the Group’s financial information presentation currency).

[2]  Basic and diluted earnings per share for profit attributable to the equity holders of the Company during the period.

[3]  According to Rosstat; by Freight Rail Turnover (measured in tonnes-km).

[4] Company estimations based on Rosstat data; calculated as a percentage of the overall freight rail transportation volume (measured in tonnes) in Russia.

[5] Globaltrans’ market share increased in metallurgical cargoes (ferrous metals, scrap metal and iron ore) from 9.1% in 2010 to 11.3% in 1H 2011; in coal (thermal and coking) from 2.8% in 2010 to 3.7% in 1H 2011 and in construction materials (including cement) from 1.7% in 2010 to 2.7% in 1H 2011.

[6] JSC “Freight One” is a subsidiary of JSC “Russian Railways” (100 percent minus 1 share).