Interim 2016 Results

Globaltrans Investment PLC (the “Company” and together with its consolidated subsidiaries “Globaltrans” or the “Group”), (LSE ticker: GLTR) today announces its financial and operational results for the six months ended 30 June 2016.

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. The presentational currency of the Group’s financial results is Russian rouble (“RUB”).

The respective financial information for the first six months of 2015 and the full year 2015 has been restated to reflect the harmonisation of the Group’s accounting policy in respect of capitalisation of capital repairs and associated spare parts. Historically due to the low numbers of these repairs, they were expensed as incurred.

Financial highlights

  • Adjusted Revenue broadly unchanged year on year at RUB 20,613 million* (-1% year on year) with the solid performance of the gondola car segment offset by weak results from the rail tank car operations and a decline in revenues from auxiliary services.
  • Efficient cost management effectively limited the rise in Operating Cash Costs to 3% year on year, substantially below the increase in the Group’s business volumes and the rise in the regulated RZD tariffs[1].
  • Adjusted EBITDA was RUB 7,648 million*, down 9% year on year with Adjusted EBITDA Margin at 37%* (H1 2015: 40%*).
  • Profit attributable to owners of the Company increased 11% year on year to RUB 1,583 million[2] benefitting from the positive contribution from the wholly owned gondola business.
  • Strong balance sheet with Net Debt of RUB 17,106 million* as of 30 June 2016. The Net Debt to Adjusted EBITDA ratio for the last twelve months ended 30 June 2016 was 1.1x* (1.0x* as of the end of 2015).
  • Total finance costs down 26% year on year reflecting improvement in the weighted average effective interest rate to 11.7%* as of 30 June 2016 as well as a decline in the Group’s Total debt over the last eighteen months period.
  • The percentage of RUB denominated debt maintained at almost 100%.

Operational highlights

  • Market share of overall Russian Freight Rail Turnover increased to 8.3% from 7.4%[3] in the same period the previous year supported by the Group’s large modern fleet, quality of service and long-term contracts.
  • Continued market outperformance with the Group’s Freight Rail Turnover up 13%[4] year on year, substantially ahead of the overall market (up 2% year on year).
  • Mixed performance across segments:
  • The Group’s Freight Rail Turnover from non-oil cargoes up 18% year on year. The bulk cargo segment contributed more than 85% of the Group’s Freight Rail Turnover in the first six months of 2016.
  • Decline in overall refined products output along with introduction of new pipeline capacities negatively affected demand for rail transportation of oil products and oil. On the back of this trend the Group’s Freight Rail Turnover in this segment reduced 17% year on year (Transportation Volumes down 10% year on year).
  • Average Price per Trip remained unchanged year on year. Average Distance of Loaded Trip increased 10% year on year. Average Number of Loaded Trips per Railcar was stable year on year.
  • Empty Run Ratio for gondola cars improved to 39% (H1 2015: 40%). Total Empty Run Ratio (for all types of rolling stock) improved to 48% (H1 2015: 53%).
  • Long-term service contracts with largest three clients (Rosneft, MMK and Metalloinvest) contributed 63% of the Group’s Net Revenue from Operation of Rolling Stock in the first six months of 2016.


  • Significant decrease in the number of railcars in Russia over the last 18 months due to the regulations on the “useful life” of railcars, is reducing capacity imbalances: gondola fleet down 13% (or about 76k units) while rail tank car fleet down 8% (or about 23k units)[5]. Further 30k gondola cars (or 6% of total gondola fleet[6]) and 13k rail tank cars (or 5% of total rail tank car fleet5) are expected to reach the end of useful life by the end of 2017[7].
  • Bulk cargo segment recovery along with ongoing industry-wide scrappage of old gondola cars support pricing environment in this segment.
  • Volume and pricing pressure in oil products and oil segment along with ongoing overall cost pressures are expected to continue.
  • The Group is seeking to clarify the recently proposed regulatory initiatives in respect of the supervision of price increases for rail operators’ services.

Commenting on Globaltrans’ first half results, CEO Valery Shpakov, said:
“While the first half was marked by continuing challenging market conditions, the recovery in the bulk cargo segment, in which Globaltrans is very well positioned, enabled the Group to substantially boost its business volumes and outperform the market. The impressive growth delivered in this segment was possible thanks to a combination of the Group’s large, modern fleet, quality of service and long-term partnerships with clients.

However, the introduction of new pipeline capacities and a decline in overall refined products output negatively affected demand for rail transportation of oil products and oil, and Globaltrans was clearly not immune to this trend. The negative impact of this segment’s decline can be seen in the Group`s overall performance for the reporting period.

Against this backdrop, Globaltrans has nonetheless delivered respectable financial results for the first six months of the year. The Group’s focus on efficient cost management bore fruit with cost inflation held in check. We were particularly pleased that the Group was able to report an increase in profit attributable to owners of the Company on the back of solid results from the gondola business, which is fully owned by the Group and therefore a key contributor to the overall performance. The Company generated strong cash flow from operations and, despite the increase in CAPEX for selected acquisitions of petrochemical tank containers and capital repairs, the level of Free Cash Flow remained solid. This enabled the Group to pay substantial dividends and maintain comfortable leverage.

The second half of 2016 is likely to bring further challenges. Provided the macroeconomic picture remains sound, the Group expects a balanced gondola market alongside continued weak market conditions in the oil products and oil segment. As always, maintaining comfortable leverage, focusing on efficient cost management, strengthening client relationships and supporting appropriate shareholder remuneration will remain the Group’s top priorities.”


The selection of historical operational and financial information are available on Globaltrans’ corporate website (

Analyst and investor conference call

The release of the Group’s financial and operational results will be accompanied by an analyst and investor conference call hosted by Valery Shpakov, Chief Executive Officer and Alexander Shenets, Chief Financial Officer.

Date:                Tuesday, 30 August 2016
Time:               13.00 London / 8.00 New York (EDT) / 15.00 Moscow

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

UK toll free:      0808 109 0700
International:    +44 (0) 20 3003 2666

As there will be simultaneous translation for the first part of the call (slide presentation), you should state whether you prefer to listen in English or Russian. During the Q&A session, all participants will hear both languages.

There will also be a webcast of the call available through the Globaltrans website ( Please note that this will be a listen-only facility.

Globaltrans Investor Relations
Mikhail Perestyuk / Daria Plotnikova
+357 25 328 860

For international media
Teneo Strategy
Laura Gilbert / Sabine Pirone
+44 20 7240 2486

Globaltrans is a leading private freight rail transportation group with operations in Russia, the CIS and the Baltic countries. The Group’s main business is the provision of freight rail transportation services. Globaltrans provides services to more than 500 customers and its key customers include a number of large Russian industrial groups in the metals and mining and the oil products and oil sectors.

Globaltrans' global depositary receipts (ticker symbol: GLTR) have been listed on the Main Market of the London Stock Exchange since May 2008. Globaltrans was the first freight rail transportation group with operations in Russia to have an international listing.

To learn more about Globaltrans, please visit

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.


[1] The regulated RZD tariffs (including for the traction of empty railcars) was up 9% year on year from January 2016.

[2] The Group’s Profit for the period was RUB 2,341 million in the first six months of 2016, down 13% year on year.

[3] For the purpose of this announcement the Group’s market share is calculated as a percentage of the overall Russian Freight Rail Turnover. It includes the freight turnover generated by the Engaged Fleet. The Group’s market share of overall Russian Transportation Volumes was 8.4% in H1 2016 (H1 2015: 8.3%).

[4] The Group’s Freight Rail Turnover (excluding Engaged Fleet) was up 15% year on year.

[5] Estimated by the Company.

[6] Overall Russian fleet of respective type as of 30 June 2016. Estimated by the Company.

[7] In the next 18 months to the end of 2017.