Interim 2019 Results and Approval of Interim and Special Interim Dividends

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 2019 along with the approval of interim and special interim dividends.

In this announcement, the Group has used certain measures not recognised by EU IFRS or IFRS (referred to as “non-GAAP measures”) as supplemental measures of the Group’s operating performance. The management believes that these non-GAAP measures provide valuable information to readers, because they enable them to focus more directly on the underlying day-to-day performance of the Group’s business. The Company also reports certain operational information to illustrate the changes in the Group’s operational and financial performance during the reporting periods. Certain financial information which is derived from the management accounts is marked in this announcement with an asterisk {*}. Information (non-GAAP financial and operating measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions are provided at the end of this announcement. Reconciliations of the non-GAAP measures to the closest EU IFRS measures are included in the body of this announcement. The presentational currency of the Group’s financial results is the Russian rouble (“RUB”).

Key highlights

  • Strong performance: solid pricing and efficient cost control lead to better margins, higher revenues and profits;
  • Adjusted EBITDA growth of 22% year on year outpaced Adjusted Revenue growth of 14% as Adjusted EBITDA Margin rose to 59%;
  • Continued solid cash generation from operations - up 18% year on year;
  • Leverage maintained at a low level with Net Debt to Adjusted EBITDA at 0.53x (twelve months to 30 June 2019);
  • Attractive interim 2019 and special interim dividends approved totalling RUB 8.3 billion or RUB 46.55 per share/GDR;
  • Strong final 2019 dividend of about RUB 8.3 billion targeted – would result in total 2019 dividend (including interim, final and special) of about RUB 16.6 billion exceeding that of 2018.

Commenting on Globaltrans’ interim 2019 results, CEO Valery Shpakov said: “We gained further momentum in the first half of 2019 and delivered strong results. By leveraging our powerful operational model and high quality of service we were able to efficiently deploy all our newly acquired fleet and outperform the Russian market in terms of volumes. The new long-term contracts we signed last year are proceeding well and performing in line with our expectations, delivering value to our clients whilst driving our revenues. Importantly, we successfully accommodated the volatility in our clients’ logistics, and not only maintained operational excellence but also increased profitability.

Our key financial metrics continued to grow which, combined with our low level of leverage, enabled the Group to deliver the attractive dividend we had targeted. We will maintain our focus on generating strong returns for our shareholders building on the solid foundations provided by our robust cash generation, discretionary expansion CAPEX and moderate maintenance requirements. Despite some bulk segment volatility, the second half started well for us, benefitting both from our long-term contracts and our exposure to the rail tank car segment. Together, these put us in a secure position to target a strong total dividend for the full year, exceeding the level of 2018.”

Financial and operational performance

Strong financial results, further margin expansion and continued low leverage.

  • Total revenue increased 9% year on year to RUB 47.2 billion;
  • Adjusted Revenue was up 14% year on year to RUB 34.4 billion supported by the strong performance of the gondola and rail tank car sectors;
  • Total Operating Cash Costs rose 5% year on year reflecting cost inflation and higher Empty Runs;
  • Operating profit increased 23% year on year to RUB 16.7 billion;
  • Adjusted EBITDA Margin expanded to 59% (H1 2018: 55%) with Adjusted EBITDA up 22% year on year to RUB 20.2 billion;
  • Profit for the period rose 22% year on year to RUB 12.0 billion;
  • Cash generated from operations (after “Changes in working capital”) increased 18% year on year to RUB 19.4 billion;
  • Free Cash Flow remained robust at RUB 7.9 billion while Total CAPEX rose (RUB 7.3 billion, up 91% year on year) reflecting the fact that the majority of the Group’s planned annual expansion investments were undertaken during the first six months of 2019;
  • Leverage continued to be held at a low level with Net Debt to Adjusted EBITDA at 0.53x for the twelve months to 30 June 2019 (2018 end: 0.56x);
  • Net Debt rose 5% to RUB 19.6 billion compared to the end of 2018. Nearly 100% of debt is denominated in RUB, the Company’s functional currency.

Attractive interim 2019 dividend delivered as targeted reflecting solid cash generation, low leverage and intention to maintain an efficient capital structure.

  • The Board approved interim and special interim dividends for the first half of 2019 of a combined RUB 8.3 billion or RUB 46.55 per share/GDR;
  • Total interim 2019 dividend equal to 120% of the Group’s Attributable Free Cash Flow for the first six months of 2019 (RUB 7.0 billion);
  • The record date is set as 9 September 2019 with GDRs marked as ex-dividend on 6 September 2019;
  • The dividend will be paid in US dollars in the total amount of approximately 69.74086 US cents per one ordinary share/GDR not later than 20 September 2019 with conversion executed at the Central Bank of Russia’s official exchange rate for the Russian rouble as of 30 August 2019 (1 USD: 66.7471 RUB). Holders of GDRs will receive the dividend approximately three business days after the payment date.

Market outperformance in volumes, net revenue growth and strong pricing with volatility in client logistics successfully and profitably accommodated.

  • Market outperformance in Transportation Volumes[1] (up 3.6% year on year compared to the overall Russian market decline of 1.6%).
    • Volumes grew in non-oil (up 3% year on year) and oil products and oil (up 4% year on year) segments;
    • Freight Rail Turnover decreased 5% year on year mainly reflecting an 8% year-on-year decline in Average Distance of Loaded Trip on the back of changed client logistics;
    • Average Number of Loaded Trips per Railcar decreased 4% year on year principally as a result of changed client logistics and a reduction in average speeds on the Russian Railways (“RZD”) rail network, caused for the most part by ongoing major rail infrastructure modernisation projects.
  • Successful partnerships enabled a 14% year-on-year increase in Net Revenue from Operation of Rolling Stock.
    • Net Revenue from the new five-year contracts signed with TMK and ChelPipe Group in 2018 almost doubled year on year;
    • 60% of Net Revenue from Operation of Rolling Stock was contributed by long-term contracts (Rosneft, Metalloinvest, MMK, TMK and ChelPipe), compared to 55% in the same period in the previous year.
  • Strong pricing maintained.
    • Further price increase achieved with Average Price per Trip up 10% year on year reflecting favourable gondola market conditions and relatively stable pricing in the rail tank car segment.
  • Powerful and sizable operating platform enabled smooth and profitable adaptation to volatility in client logistics; operational excellence maintained.
    • Substantial shift in logistics patterns of long-term clients drove anticipated increase in Empty Runs with the growth in the respective Empty Run Costs reflected in the commercial arrangements across these clients’ transportation portfolios;
    • As anticipated, the Empty Run Ratio for gondola cars increased to 43% (H1 2018: 37%) yet remained one of the lowest on the Russian market;
    • Total Empty Run Ratio (for all types of rolling stock) rose to 51% (H1 2018: 45%);
    • Share of Empty Run Kilometers paid by Globaltrans remained stable at 90% compared to 91% in the same period the previous year.
  • Strong business platform with Total Fleet exceeding 70,000 units, share of Owned Fleet remained at 95%.
    • Ongoing moderate investments in 2019 with 1,034 units delivered in the reporting period, driving Owned Fleet to 66,304 units[2];
    • Leased-in Fleet increased 6% compared to the end of 2018 to 3,833 units (mostly rail tank cars);
    • Average Rolling Stock Operated was up 8% year on year to 56,780 units.

Market overview

Solid demand and continued strong pricing in the first six months of 2019; industry fundamentals supported by more mature gondola market and continued expansion of Far Eastern railways.

  • Overall Russia’s freight rail turnover continued to grow in the first six months of 2019 (up 2.0% year on year) while volumes decreased 1.6% year on year.
  • Bulk cargo volumes held relatively stable.
    • Moderate volume softening in June largely driven by weaker coal volumes, firmed up in July supported by RZD tariff incentives;
    • Net increase in overall gondola capacity was about 3% or 17,900 units[3] over the first six months of 2019;
    • Overall healthy pricing environment with modest pressure on spot market prices in July and August.
  • Balanced supply and demand in oil products and oil segment with strong pricing.
    • Volumes in oil products and oil segment were down 2% year on year reflecting temporary decrease in May-June due to scheduled repair and maintenance works at some refineries. Volumes started to rebound in July;
    • Strong pricing continues supported by ongoing fleet scrappage with a net decrease in overall rail tank capacity of about 1% or 2,000 units.
  • Competitive landscape in gondola market is now characterised by established professional players and captive operators.
    • Top-10 players operate about 80% of Russia’s overall gondola fleet;
    • Significant portion of largest operators either service clients on long-term contracts or are captive.
  • Continued expansion of Russian rail network throughput capacity towards the East to improve industry fundamentals supporting coal export volumes to more favourable Asian markets.
    • First stage of expansion (2012-2020) is more than 80% completed with over 50 million tonnes of throughput capacity added, almost doubling the level of capacity compared to 2012. Remaining 10 million tonnes are expected to be added by the end of 2020;
    • Second stage (2020-2024) is expected to increase the throughput capacity by more than 60 million tonnes (an over 50% increase on 2020 levels).
  • Average speeds on the RZD rail network remained under pressure, caused by ongoing major rail infrastructure modernisation projects.

Management priorities and outlook

Strong business model supports pricing outlook with solid cash generation and moderate investments providing secure platform for strong final 2019 dividend target.

  • About 70% of first half 2019 Net Revenue from Operation of Rolling Stock was generated either from long-term contracts or by the rail tank car business.
    • Efficient logistics and long-term contracts are expected to limit volatility in gondola pricing in the second half of 2019;
    • A constructive second-half 2019 pricing outlook in the rail tank car segment is underpinned by the Group’s unique locomotive competences and a long-term contract.
  • Cost efficiency remains a focus, taking into account ongoing cost pressures related to higher regulated RZD tariffs for the traction of empty railcars and increased costs for certain spare parts.
  • Increased volatility in client logistics and certain temporary infrastructure constraints keep the emphasis on maintaining logistics efficiency.
  • Majority of planned 2019 annual expansion CAPEX completed, maintenance CAPEX to stay moderate.
    • The majority of planned annual expansion investments already undertaken in the first six months of 2019 with 1,098 units purchased on a cash basis (including 8 locomotives)[4];
    • Maintenance CAPEX is expected to stay moderate at about RUB 6 billion in 2019 with annual fleet scrappage of about 200 units in the same period.
  • Strong final 2019 dividend targeted, dividends remain a priority.
    • Strong final 2019 dividend (including final and special final) of about RUB 8.3 billion targeted, which would mean a total dividend in respect of the full year 2019 (including interim, final and special) of about RUB 16.6 billion, exceeding the level of 2018;
    • Solid cash generation, moderate maintenance CAPEX and discretionary expansion CAPEX provide a cushion for Globaltrans’ ability to pay strong dividends.


All of the above materials along with 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, CEO and Alexander Shenets, CFO.

Date: Monday, 2 September 2019
Time: 14.00 Moscow / 12.00 London / 07.00 New York (EDT)

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 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
Lightship Consulting
Laura Gilbert
+44 7799 413351

Globaltrans is a leading 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 prominent Russian industrial groups in the metals and mining and the oil products and oil sectors.

The Group had a Total Fleet of more than 70 thousand units at 30 June 2019. Universal gondola cars and rail tank cars constitute the backbone of the Group’s fleet. About 95% of the Total Fleet is owned by the Group with an average age of 11 years.

In the first six months of 2019, the Group’s Freight Rail Turnover (including Engaged Fleet) was 76.1 billion tonnes-km with the total revenue amounting to RUB 47.2 billion.

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] Excluding Engaged Fleet.

[2] In the first six month of 2019 the Group took delivery of 1,034 units (including 492 specialised containers, 338 gondola cars, 200 flat cars and 4 locomotives) and disposed of 135 units.

[3] Estimated by the Company. Net change in Russia’s overall fleet of respective rolling stock as of 30 June 2019 compared to the end of 2018.

[4] In the first six months of 2019 the Group purchased on a cash basis 1,098 units, including 538 specialised containers, 338 gondola cars, 214 flat cars and 8 locomotives.