REG - Globaltrans Inv PLC - Full-Year 2021 Results and Market Update
28/03/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220328:nRSb1526Ga&default-theme=true
RNS Number : 1526G Globaltrans Investment PLC 28 March 2022
For immediate release
28 March 2022
Globaltrans Investment PLC
Full-Year 2021 Results
and Market Update
Globaltrans Investment PLC (the "Company" and together with its consolidated subsidiaries "Globaltrans" or the "Group"),
(LSE/MOEX ticker: GLTR) today announces its financial and operational results
for the year ended 31 December 2021 along with the update on recent
developments.
In this announcement, the Group has used certain measures not recognised by EU
IFRS or IFRS (referred to as "non-IFRS measures") as supplemental measures of
the Group's operating performance. The management believes that these non-IFRS
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-IFRS 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-IFRS 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 market recovery, increased Free Cash Flow and reduced Net Debt further strengthened Group foundations
· Significant H2 2021 market recovery with overall Russian freight
rail turnover at an all-time high in 2021 largely driven by robust bulk cargo
demand.
· Recovery in gondola market rates starting in late Q2 2021
continued through the year with 2021 bulk volumes exceeding pre-COVID levels;
tank market pricing remained robust with volume recovery accelerating in H2
2021.
· Two key service contracts extended in 2021 - Rosneft for 5 years
and Metalloinvest for 2 years (with higher service volumes agreed).
· Adjusted EBITDA increased 8% year on year to RUB 29.0 billion.
· Free Cash Flow increased 7% year on year to RUB 16.1 billion
despite the increase in Total CAPEX.
· Profit for the year rose 24% year on year to RUB 15.1 billion.
· Net Debt fell 32% with Net Debt to Adjusted EBITDA at 0.6x
compared to 1.0x at end 2020.
· Above-target interim 2021 dividends delivered although the final
2021 dividends are temporarily suspended due to both technical limitations
regarding upstreaming cash to the Cyprus holding company and the objective of
establishing liquidity buffers.
Commenting on Globaltrans' full-year 2021 results, CEO Valery Shpakov said:
"Globaltrans' excellent positioning meant that the significant market recovery
seen in the second half of 2021 was converted into a strong business
performance for the full year. While the start of 2022 saw these robust
markets continuing, we are well aware that we have entered an unprecedented
time.
We are heartened by the fact that we strengthened our business across the
board in 2021 with better financial results, lower leverage and renewed key
long-term contracts. Our Free Cash Flow remained strong in 2021 despite the
increase in Total CAPEX and our costs were held in check.
In light of current environment, it is worth noting that all of our debt is
denominated in roubles and is fixed rate, with manageable repayment schedules
given the ongoing level of cash generation and good level of available
liquidity. Importantly, all of our key contracts continue to perform as of
today.
Globaltrans has strong foundations and world-class operations and management
structures. We continue to be focused on shareholder value creation although
we have temporarily put on hold final dividends for 2021 on the back of
factors beyond our control. While visibility going forward is understandably
low, I believe we are well positioned to weather what lies ahead."
FINANCIAL RESULTS
Increased profitability as costs controlled; strong Free Cash Flow supported successful deleveraging
· Adjusted Revenue rose 6% year on year to RUB 58.5 billion on the
back of the recovery in gondola rates in H2 2021 coupled with continued robust
pricing in the tank car segment.
· Total Operating Cash Costs were held in check contributing to an
increase in the Adjusted EBITDA Margin to 50% in 2021 compared to 49% in 2020.
· Adjusted EBITDA rose 8% to RUB 29.0 billion.
· Strong Free Cash Flow increased 7% year on year to RUB 16.1
billion despite a 22% increase in Total CAPEX to RUB 8.4 billion following
purchases of tank cars and increased maintenance CAPEX.
· Net Debt reduced 32% in 2021 to RUB 18.5 billion compared to the
end of 2020; leverage was at a low level with Net Debt to Adjusted EBITDA at
0.6x compared to 1.0x at end 2020.
· All the Group's debt has fixed interest rates and is denominated
in RUB, the functional currency of the Group.
Portfolio optimisation to increase focus on core segments
· BaltTransServis stake acquisition - unique competencies and 100%
consolidation
o Acquisition of the 40% outstanding stake in BaltTransServis (bringing the
Company's ownership to 100%), one of the leading Russian freight rail
operators of tank cars, for RUB 9.1 billion in cash implying a 2021 P/E of
about 4.5x.
o BaltTransServis has a strong market position, long-term service contracts
and unique competencies in operating its own locomotives with a total fleet of
13,136 units 1 .
o Provides increased focus on and exposure to an attractive oil products and
oil segment and enables the consolidation of 100% of the Free Cash Flow of
this cash generative business.
o Globaltrans became the effective sole owner of BaltTransServis in February
2022 with closing completed in March 2022.
· SyntezRail disposal - limited scope for value growth or synergies
o Sale of Group's 60% stake in small non-core container operator SyntezRail
completed in October 2021 for RUB 1.1 billion in cash, implying an EV/EBITDA
of about 6.8x 2 and a return on invested capital of about 3.8x.
o Scope for synergies with core operations and potential for further value
growth were both considered limited.
DIVIDENDS
Robust above-target interim 2021 dividends delivered; final 2021 dividend on
hold
· Improving dividend capacity over H1 2021 with gondola prices
recovering enabled payment of above-target Interim 2021 dividends (regular and
special) of RUB 4.0 billion or RUB 22.50 per share/GDR 3 in September 2021.
· Final dividends for 2021 temporarily suspended due to both
technical limitations regarding upstreaming cash to the Cyprus holding company
and the objective of establishing liquidity buffers.
OPERATIONAL PERFORMANCE
Freight Rail Turnover growth resumed and gondola rates recovered amid growing
demand for Globaltrans' services
· The Group's Freight Rail Turnover (excluding Engaged Fleet)
returned to growth in H2 2021, rising 8% on H1 2021, but could not fully
compensate for the weather-related delays, congestion at key client facilities
and sluggish demand in the oil products and oil segment seen in H1 2021 with
full-year Freight Rail Turnover 2% lower year on year 4 .
· Average Price per Trip rose 11% year on year in 2021 reflecting a
recovery in gondola market rates in H2 2021 with continued solid pricing in
the oil products and oil segment.
· Growing demand for Globaltrans' services drove the increase in
the number of leased-in gondola cars with 2.2 thousand units added and
underpinned the purchase of 381 tank cars, with 197 delivered in 2021. The
remainder will be delivered by the end of March 2022 along with an additional
119 tanks cars acquired in early 2022.
· Gondola Empty Run Ratio further improved to 44% (2020: 45%) - one
of the lowest in the Russian market - reflecting continued adjustments to
cargo and client mix due to the ongoing impact of the COVID-19 pandemic.
· Total Empty Run Ratio (for all types of rolling stock) was
unchanged year on year at 51%.
· Total Fleet declined 4% or 2,582 units to 69,106 units as of the
end of 2021 largely reflecting the sale of the specialised container operator
SyntezRail in October 2021. The average age of the Group's Owned Fleet was
13.8 years as of the end of 2021.
Robust client retention with successful key contract extensions in 2021
· Strong portfolio of service contracts contributed 59% of Net
Revenue from Operation of Rolling Stock in 2021.
· These long-term service contracts provide for better volume
visibility and lower pricing volatility and enable logistical efficiencies.
· Two key service contracts were successfully extended in 2021:
o Rosneft for 5 years to the end of March 2026.
o Metalloinvest for 2 years to the end of 2023 with serviced volumes increased
to approximately 70% of Metalloinvest's freight rail needs from 50%
previously.
2021 MARKET REVIEW
Strong H2 2021 recovery: gondola rates improvement and accelerated recovery in
tank car demand
· Full-year overall Russian freight rail turnover reached an all-time high rising 3.6% year on year in 2021, exceeding the pre-COVID level of 2019 by 1.3%.
· Strong performance continued into the beginning of 2022 with overall Russian freight rail turnover in January - February 2022 up 4.3% year on year, which is 4.5% and 1.1% higher than the same period in 2020 and 2019 respectively.
Non-oil (bulk) cargo volumes have exceeded pre-COVID levels
· Overall non-oil (bulk) cargo volumes rose 3.0% year on year in 2021 and were up 1.8% compared to 2019.
· Market-wide net additions of gondolas declined about 20% year on year to about 15.3 thousand units in 2021 (+2.7% compared to the end of 2020) 5 .
· Recovery in gondola rates which began in late Q2 2021 continued through 2021.
Accelerated improvement in oil products and oil segment volumes in H2 2021 despite the ongoing impact of the COVID-19 pandemic and continued OPEC+ limits
· Overall oil products and oil volume in H2 2021 rose 8.9% year on year resulting in a 4.2% year-on-year increase for full-year 2021 which was nonetheless 6.2% below the 2019 level.
· Market-wide net additions of oil products and oil tank cars stood at about 3.8 thousand units (+2.1% compared to the end of 2020) 6 .
· Robust pricing conditions continued through 2021.
OUTLOOK
Industry volumes are solid but visibility is now low; nonetheless Globaltrans
remains well positioned to weather the unprecedented environment
· Market demand and pricing have been relatively solid to date in
2022 but visibility is now low and volatility is expected to rise going
forward.
· Impact of sanctions on volumes of key industrial cargoes is not
yet known.
· Far East rail infrastructure expansion project is ongoing and
will support rise in exports to Asia.
Globaltrans has strong operational capabilities and extensive financial
buffers
· Impact on operations to date is moderate with all key service
contracts continuing to perform as of today.
· Temporary blocking of about 5% of the Group's Total Fleet in
Ukraine mitigated by Globaltrans' ability to make necessary logistics
adjustments.
· The Group had RUB 6.6 billion in cash as of the end of February
2022, continued free cash flow generation and moderate debt repayments of RUB
13.7 billion due in 2022. 100% of debt is RUB denominated with a fixed rate.
· Focus on cash flow is driving a temporary suspension of expansion
CAPEX and ongoing strict cost control.
Continued focus on shareholder value
· Ongoing GDR buyback programme 7 : 0.19% of the Company's share
capital purchased in February - March 2022. The Board of Directors recommended
shareholders approve at the Annual General Meeting ("AGM") called for 26 April
2022 a new buyback programme (for up to 10% of the share capital, including
GDRs already held by the Company) to run for a twelve-month period from the
date of the AGM.
· Final 2021 dividends temporarily suspended due to both technical
limitations regarding upstreaming cash to the Cyprus holding company and the
objective of establishing liquidity buffers.
· Imposed suspension of GDRs trading on the London Stock Exchange
and Moscow Exchange continued as of the date of publication.
DOWNLOADS
· The Group's consolidated management report and consolidated
financial statements for the year ended 31 December 2021 are available for
viewing at
ttp://www.rns-pdf.londonstockexchange.com/rns/1526G_1-2022-3-27.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1526G_1-2022-3-27.pdf) .
· The related Full-Year 2021 Results Presentation is available for
viewing at
http://www.rns-pdf.londonstockexchange.com/rns/1526G_2-2022-3-27.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/1526G_2-2022-3-27.pdf) .
All of the above materials along with a selection of historical operational
and financial information are available on Globaltrans' corporate website
(www.globaltrans.com).
ANALYST AND INVESTOR CONFERENCE CALL / WEBCAST
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, 28 March 2022
Time: 13.00 London / 15.00 Moscow / 08.00 New York (EDT)
To participate in the conference call please dial one of the following
numbers:
UK toll free: 0800 279 6877
International: +44 (0) 330 165 4012
Russia: +7 (8) 495 646 5137
Conference ID:
EN - 9396320
RU - 8863111
There will be a simultaneous translation for the call, with both English and
Russian available using the conference IDs provided. There will also be a
webcast of the call available through the Globaltrans website
(www.globaltrans.com).
Q&A Session
Please note that this will be a listen-only session. Should you have any
questions, please submit them by 11:30 Moscow time on 28 March 2022 to
irteam@globaltrans.com.
VIRTUAL NON-DEAL ROADSHOW
The results announcement will be followed by a virtual non-deal roadshow. We
are offering conference calls from 29 March to 8 April 2022. If you are
interested in talking to the Company, please contact the IR Team; details are
below.
ENQUIRIES
For investors
Mikhail Perestyuk / Daria Plotnikova
+357 25 328 860
irteam@globaltrans.com (mailto:irteam@globaltrans.com)
For Russian media
Anna Vostrukhova
+357 25 328 863
media@globaltrans.com (mailto:media@globaltrans.com)
For international media
Laura Gilbert, Lightship Consulting
+44 7799 413351
Laura.Gilbert@lightshipconsulting.co.uk
(mailto:Laura.Gilbert@lightshipconsulting.co.uk)
NOTES TO EDITORS
Globaltrans Investment PLC ("Company" and together with its consolidated
subsidiaries "Globaltrans" or the "Group") is a leading freight rail
transportation group with subsidiary operations across Russia, the CIS and the
Baltic countries.
The Company was founded in 2004 by a group of entrepreneurs who combined their
freight rail businesses under the single brand Globaltrans. These founders
remain key shareholders of the Group.
Throughout its years of operation, the Company has pursued a prudent approach
to investment, expanding its fleet both by means of organic growth and through
the acquisition of other rail operators. Globaltrans' total fleet is currently
almost three times larger than it was at the time of the Company's IPO in
2008.
The Group's dividend policy establishes a transparent and straightforward
approach to the payment of dividends and is supported by a long history of
delivering attractive shareholder remuneration.
Globaltrans global depositary receipts (GDRs) have been traded on the Main
Market of the London Stock Exchange (ticker symbol: GLTR) since May 2008 and
on the Level One quotation list of the Moscow Exchange since October 2020
(ticker symbol: GLTR) 8 .
Due to its vast logistics capabilities, the Group is able to efficiently
manage industrial cargo flows, transporting metallurgical cargoes, oil
products and oil, coal and construction materials. The Group serves a broad
range of clients in Russia and the CIS including some of Russia's leading
companies.
Globaltrans has a total fleet (including owned and leased in under finance and
operating leases) of more than 69 thousand units as of the end of 2021, of
which about 94% are owned by the Company. The core of the fleet is universal
gondola cars used for a broad range of bulk cargoes (69% of total fleet) and
tank cars for transporting oil products and oil (28% of total fleet).
Globaltrans also manages its own fleet of mainline locomotives with 71 units
that mostly provide traction for its block trains.
The Group's logistics management principally aims to provide reliable
services, responding promptly and flexibly to customer needs, while achieving
a good level of profitability for the business. The main component of the
Group's centralised logistics system is its single dispatching centre that
monitors every aspect of Globaltrans' fleet operation. By effectively managing
shipments and routes, Globaltrans ensures high utilisation of its fleet and
achieves maximum productivity and quality of service.
Additional information on Globaltrans is available at www.globaltrans.com.
(http://www.globaltrans.com/)
RESULTS IN DETAIL
The following tables provide the Group's key financial and operational
information for the years ended 31 December 2021 and 2020.
EU IFRS financial information
2020 2021 Change
RUB mln RUB mln %
Revenue 68,367 73,151 7%
Total cost of sales, selling and marketing costs and administrative expenses (50,664) (52,630) 4%
Operating profit 18,811 21,627 15%
Finance costs - net (2,100) (2,189) 4%
Profit before income tax 16,712 19,438 16%
Income tax expense (4,525) (4,338) -4%
Profit for the year 12,187 15,100 24%
Profit attributable to:
Owners of the Company 10,587 12,987 23%
Non-controlling interests 1,600 2,113 32%
Basic and diluted earnings per share for profit attributable to the equity 59.24 72.69 23%
holders of the Company during the year (RUB per share)
2020 2021 Change
RUB mln RUB mln %
Cash generated from operations (after changes in working capital) 28,278 30,058 6%
Tax paid (3,052) (2,808) -8%
Net cash from operating activities 25,226 27,250 8%
Net cash used in investing activities (6,528) (6,854) 5%
Net cash used in financing activities (20,357) (12,517) -39%
Non-IFRS financial information
2020 2021 Change
RUB mln RUB mln %
Adjusted Revenue 54,934 58,492 6%
Including
Net Revenue from Operation of Rolling Stock 50,527* 54,319* 8%
Operating lease of rolling stock 1,932 1,832 -5%
Net Revenue from Specialised Container Transportation 1,923* 1,643* -15%
Total Operating Cash Costs 29,121 29,751 2%
Including
Empty Run Cost 15,799* 15,429* -2%
Employee benefit expense 4,154 5,491 32%
Repairs and maintenance 4,261 3,969 -7%
Fuel and spare parts - locomotives 1,630 1,972 21%
Adjusted EBITDA 26,807 29,044 8%
Adjusted EBITDA Margin, % 49% 50%
Total CAPEX (including maintenance CAPEX) 6,941 8,439 22%
Free Cash Flow 15,103 16,131 7%
Attributable Free Cash Flow 13,503 14,018 4%
Debt profile
As of As of Change
31 December
31 December
%
2020 2021
RUB mln RUB mln
Total debt 32,015 31,318 -2%
Cash and cash equivalents 4,978 12,855 158%
Net Debt 27,037 18,464 -32%
Net Debt to Adjusted EBITDA (x) 1.0 0.6
Operational information
2020 2021 Change,
%
Freight Rail Turnover, billion tonnes-km (excluding Engaged Fleet) 150.3 146.8 -2%
Transportation Volume, million tonnes (excluding Engaged Fleet) 88.9 85.1 -4%
Average Price per Trip, RUB 36,909 41,075 11%
Average Rolling Stock Operated, units 57,484 57,347 0%
Average Distance of Loaded Trip, km 1,681 1,716 2%
Average Number of Loaded Trips per Railcar 23.8 23.1 -3%
Total Empty Run Ratio (for all types of rolling stock), % 51% 51%
Empty Run Ratio for gondola cars, % 45% 44%
Share of Empty Run Kilometres paid by Globaltrans, % 99% 99%
Total Fleet, units (at year end), including: 71,688 69,106 -4%
Owned Fleet, units (at year end) 67,762 65,067 -4%
Leased-in Fleet, units (at year end) 3,926 4,039 3%
Leased-out Fleet, units (at year end) 7,032 8,458 20%
Average age of Owned Fleet, years (at year end) 12.4 13.8
Total number of employees (at year end) 1,697 1,777 5%
Revenue
In 2021, the Group's Total revenue increased 7% year on year to RUB 73,151
million reflecting a 6% year-on-year rise in Adjusted Revenue and an 18%
year-on-year increase in "pass through
item "Infrastructure and locomotive tariffs: loaded trips". Net Revenue
from Operation of Rolling Stock (a key component of Adjusted Revenue)
benefited from improved pricing conditions in the gondola segment in the
second half of 2021 and increased 8% year on year.
The following table provides details of Total revenue, broken down by revenue-generating activity, for the years
ended 31 December 2021 and 2020.
2020 2021 Change
RUB mln RUB mln %
Railway transportation - operators services (tariff borne by the Group) 9 27,197 31,744 17%
Railway transportation - operators services (tariff borne by the client) 36,671 37,238 2%
Operating lease of rolling stock 1,932 1,832 -5%
Revenue from specialised container transportation 2,168 1,824 -16%
Other 400 514 29%
Total revenue 68,367 73,151 7%
Adjusted Revenue
Adjusted Revenue is a non-IFRS financial measure defined as "Total revenue"
adjusted for "pass through" items: "Infrastructure and locomotive tariffs:
loaded trips" and "Services provided by other transportation organisations".
"Infrastructure and locomotive tariffs: loaded trips" comprises revenue
resulting from tariffs that customers pay to the Group and the Group pays on
to RZD, which are reflected in equal amounts in both the Group's Total revenue
and Cost of sales. "Services provided by other transportation organisations"
is revenue resulting from the tariffs that customers pay to the Group and the
Group pays on to third-party rail operators for subcontracting their rolling
stock, which are reflected in equal amounts in both the Group's Total revenue
and Cost of sales. The net result of Engaged Fleet operations is reflected as
Net Revenue from Engaged Fleet and is included in Adjusted Revenue.
The Group's Adjusted Revenue was RUB 58,492 million up 6% year on year
primarily as a result of the 8% year-on-year rise in Net Revenue from
Operation of Rolling Stock.
The following table provides details of Adjusted Revenue for the years ended
31 December 2021 and 2020 and its reconciliation to Total revenue.
2020 2021 Change
RUB mln RUB mln %
Total revenue 68,367 73,151 7%
Minus "pass through" items
Infrastructure and locomotive tariffs: loaded trips 10,957 12,964 18%
Services provided by other transportation organisations 2,476 1,695 -32%
Adjusted Revenue 54,934 58,492 6%
The principal components of Adjusted Revenue include: (i) Net Revenue from
Operation of Rolling Stock, (ii) Revenue from operating leasing of rolling
stock, (iii) Net Revenue from Specialised Container Transportation, (iv) Net
Revenue from Engaged Fleet, and (v) other revenues generated by the Group's
auxiliary business activities, including freight forwarding, repair and
maintenance services provided to third parties, and other.
The following table provides a breakdown of the components of Adjusted Revenue
for the years ended 31 December 2021 and 2020.
2020 2021 Change
RUB mln RUB mln %
Net Revenue from Operation of Rolling Stock 50,527* 54,319* 8%
Operating leasing of rolling stock 1,932 1,832 -5%
Net Revenue from Specialised Container Transportation 1,923* 1,643* -15%
Net Revenue from Engaged Fleet 152 184 21%
Other 400 514 29%
Adjusted Revenue 54,934 58,492 6%
Net Revenue from Operation of Rolling Stock
Net Revenue from Operation of Rolling Stock is a non-IFRS financial measure,
derived from management accounts, describing the net revenue generated from
freight rail transportation services which is adjusted for respective "pass
through" loaded railway tariffs charged by RZD (included in the EU IFRS line
item "Infrastructure and locomotive tariffs: loaded trips").
The Group's Net Revenue from Operation of Rolling Stock, which accounted for
93% of the Group's Adjusted Revenue in 2021, increased 8% year on year to RUB
54,319 million*, principally due to the improved pricing conditions in the
gondola segment in the second half of 2021.
· Average Price per Trip was RUB 41,075, an 11% year-on-year increase
resulting from a recovery in gondola pricing and continued solid pricing in
the tank cars segment.
· Average Rolling Stock Operated remained unchanged year on year at
57,347 units.
· Average Number of Loaded Trips per Railcar declined 3% year on year
as weather related delays at the main export ports as well as congestion at
key gondola client facilities impacted the gondola segment performance.
Revenue from operating leasing of rolling stock
Revenue from operating leasing of rolling stock contributed 3% of the Group's
Adjusted Revenue in 2021 and was 5% lower year on year at RUB 1,832 million
reflecting the decline in average leasing rates in the tank car segment.
Net Revenue from Specialised Container Transportation
Net Revenue from Specialised Container Transportation is a non-IFRS financial
measure, derived from management accounts, that represents the revenue
generated from the specialised container operations (included in the EU IFRS
line item: "Revenue from specialised container transportation") less the
respective "pass through" loaded railway tariffs charged by RZD (included in
the EU IFRS line item "Infrastructure and locomotive tariffs: loaded trips").
Net Revenue from Specialised Container Transportation, which accounted for 3%
of Adjusted Revenue in 2021, was down 15% year on year to RUB 1,643 million*
in 2021 due the deconsolidation of this business segment reflecting the sale
of SyntezRail from October 2021.
Net Revenue from Engaged Fleet
Net Revenue from Engaged Fleet is a non-IFRS financial measure, derived from
management accounts, that represents the net sum of the price charged to
clients for transportation by the Group utilising Engaged Fleet less the
respective "pass-through" loaded railway tariffs charged by RZD (included in
the EU IFRS line item "Infrastructure and locomotive tariffs: loaded trips")
and less the "pass-through" cost of engaging fleet from third- party rail
operators (included in the EU IFRS line item "Services provided by other
transportation organisations").
Net Revenue from Engaged Fleet, which contributed less than 1% of the Group's
Adjusted Revenue in 2021, increased 21% year on year in 2021 to RUB 184
million*, largely reflecting a rise in the number of Engaged Fleet operations
in the oil products and oil segment.
Other revenue
Other revenue, comprising 1% of the Group's Adjusted Revenue in 2021, includes
revenues generated by the Group's auxiliary business activities such as
freight forwarding, repair and maintenance services provided to
third parties, and other. It
increased 29% year on year to RUB 514 million in 2021 primarily due
to higher revenues from repair and maintenance services.
Cost of sales, selling and marketing costs and administrative expenses
The following table provides a breakdown of Cost of sales, selling and
marketing costs and administrative expenses for the years
ended 31 December 2021 and 2020.
2020 2021 Change
RUB mln RUB mln %
Cost of sales 47,066 48,334 3%
Selling and marketing costs 205 249 22%
Administrative expenses 3,394 4,046 19%
Total cost of sales, selling and marketing costs and administrative 50,664 52,630 4%
expenses
A 4% year-on-year rise in the Group's Total cost of sales, selling and
marketing costs and administrative expenses to RUB 52,630 million in 2021 was
principally due to the following factors:
· "Pass through" cost items (a combination of "Infrastructure and
locomotive tariffs: loaded trips" and "Services provided by other
transportation organisations") increased to RUB 14,659 million up 9% year on
year resulting mainly from an increase in the proportion of clients that pay
Infrastructure and locomotive tariffs: loaded trips through the Group.
· The Group's Total cost of sales, selling and marketing costs and
administrative expenses adjusted for "pass- through" cost items rose 2% year
on year to RUB 37,971 million in 2021, due to:
o Optimisation measures that helped the Company to hold Total Operating Cash
Costs relatively steady, increasing just 2% year on year to RUB 29,751 million
in 2021. Reductions in Empty Run Costs, Repairs and maintenance, Engagement of
locomotive crews and Expense relating to short-term leases (rolling stock)
were more than offset by year-on-year increases in Employee benefit expense,
Fuel and spare parts - locomotives expenses and Infrastructure and Locomotive
Tariffs - Other Tariffs.
o Total Operating Non-Cash Costs increased 1% year on year to RUB 8,221
million as a 5% year-on-year decrease in the Depreciation of property, plant
and equipment and a 99% year-on-year decline in the Amortisation of intangible
assets were more than offset by a 72% rise in the Depreciation of right-of-use
assets as the Group increased the number of leased-in gondola cars.
In order to show the dynamics and nature of the Group's cost base, individual
items of Total cost of sales, selling and marketing costs and administrative
expenses have been regrouped as shown below:
2020 2021 Change
RUB mln RUB mln %
"Pass through" cost items 13,434 14,659 9%
Infrastructure and locomotive tariffs: loaded trips 10,957 12,964 18%
Services provided by other transportation organisations 2,476 1,695 -32%
Total cost of sales, selling and marketing costs and administrative 37,231 37,971 2%
expenses (adjusted for "pass through" cost items)
Total Operating Cash Costs 29,121 29,751 2%
Empty Run Costs 15,799* 15,429* -2%
Employee benefit expense 4,154 5,491 32%
Repairs and maintenance 4,261 3,969 -7%
Fuel and spare parts - locomotives 1,630 1,972 21%
Infrastructure and Locomotive Tariffs - Other Tariffs 998* 1,219* 22%
Engagement of locomotive crews 421 294 -30%
Expense relating to short-term leases (rolling stock) 824 274 -67%
Other Operating Cash Costs 1,034 1,103 7%
Total Operating Non-Cash Costs 8,109 8,221 1%
Depreciation of property, plant and equipment 6,969 6,643 -5%
Depreciation of right-of-use assets 655 1,127 72%
Loss on derecognition arising on capital repairs 420 484 15%
Net impairment losses on trade and other receivables 6 8 40%
Amortisation of intangible assets 60 0.7 -99%
Net loss/(gain) on sale of property, plant and equipment 0.3 (42) NM
Total cost of sales, selling and marketing costs and administrative 50,664 52,630 4%
expenses
"Pass through" cost items
Infrastructure and locomotive tariffs: loaded trips
Infrastructure and locomotive tariffs: loaded trips is in principle a "pass
through" cost item for the Group(( 10 )) and is reflected in equal amounts in
both the Group's Total revenue and Cost of sales.
The 18% year-on-year increase in this item in 2021 to RUB 12,964 million
primarily reflected the higher proportion of clients that
pay infrastructure and locomotive tariffs: loaded trips through the Group.
Services provided by other transportation organisations
Services provided by other transportation organisations is in principle a
"pass through" cost item for the Group and is reflected in equal amounts in
both the Group's Total revenue and Cost of sales and includes tariffs
that the Group pays to third-party rail operators for subcontracting
their rolling stock (Engaged Fleet).
Services provided by other transportation organisations fell 32% year on year
to RUB 1,695 million in 2021 primarily due to a lower number of Engaged Fleet
operations in the gondola segment.
Total Operating Cash Costs
Total Operating Cash Costs (a non-IFRS financial measure) represents operating
cost items payable in cash and calculated as "Total cost of sales, selling and
marketing costs and administrative expenses" less the "pass through" cost
items and non-cash cost items.
Total Operating Cash Costs for 2021 of RUB 29,751 million were 2% higher
compared to 2020 due to a combination of the factors described below.
The following table provides a breakdown of the Total Operating Cash Costs for
the year ended 31 December 2021 and 2020.
2021 2020 2021 Change
% of total RUB mln RUB mln %
Empty Run Costs 52% 15,799* 15,429* -2%
Employee benefit expense 18% 4,154 5,491 32%
Repairs and maintenance 13% 4,261 3,969 -7%
Fuel and spare parts - locomotives 7% 1,630 1,972 21%
Infrastructure and Locomotive Tariffs - Other Tariffs 4% 998* 1,219* 22%
Engagement of locomotive crews 1% 421 294 -30%
Expense relating to short-term leases (rolling stock) 1% 824 274 -67%
Other Operating Cash Costs 4% 1,034 1,103 7%
Total Operating Cash Costs 100% 29,121 29,751 2%
Empty Run Costs
Empty Run Costs (a non-IFRS financial measure meaning costs payable to RZD for
forwarding empty railcars) is derived from management accounts and presented
as part of the "Infrastructure and locomotive tariffs: empty run trips and
other tariffs" component of "Cost of sales" reported under EU IFRS.
Empty Run Costs, which accounted for 52% of the Group's Total Operating Cash
Costs in 2021, declined 2% year on year to RUB 15,429 million* due to:
· A 3.7% year-on-year increase in regulated RZD tariffs for the
traction of empty railcars.
· A 2% year-on-year decrease in the Group's Freight Rail Turnover.
· A Total Empty Run Ratio (for all types of rolling stock) that was
unchanged year on year at 51% with the Share of Empty Run Kilometers paid by
Globaltrans also remaining broadly stable year on year at 99%.
Employee benefit expense
Employee benefit expense for 2021, which represented 18% of the Group's Total
Operating Cash Costs, increased 32% year on year to RUB 5,491 million.
This resulted from:
· Inflation driven growth in wages and salaries.
· A 5% year-on-year increase in the average headcount due to the
continued shift to in-house locomotive crews.
· Increases in bonuses reflecting the strong 2021 business performance
and an increase in reserves for the share price linked key management
remuneration programme.
Repairs and maintenance
Repairs and maintenance costs, which comprised 13% of the Group's Total
Operating Cash Costs in 2021, declined 7% year on year to RUB 3,969 million
as lower prices for depot repairs and expenses for other spare parts and
repair works were partially offset by the increase in depot repairs undertaken
in the reporting year.
Fuel and spare parts - locomotives
Fuel and spare parts - locomotives expenses, which accounted for 7% of the
Group's Total Operating Cash Costs in 2021, rose 21% year on year to RUB
1,972 million in 2021 reflecting an inflation-driven rise in the cost of fuel
and certain spare parts along with greater usage of owned locomotives in light
of the post-COVID recovery in the oil products and oil sector.
Infrastructure and Locomotive Tariffs - Other Tariffs
Infrastructure and Locomotive Tariffs - Other Tariffs (a non-IFRS financial
measure, derived from management accounts), which is presented as part of the
"Infrastructure and locomotive tariffs: empty run trips and other tariffs"
component of cost of sales reported under EU IFRS. This cost item includes the
costs of the relocation of rolling stock to and from maintenance, the
transition of purchased rolling stock to its first place of commercial
utilisation, and the relocation of rolling stock in and from lease operations,
as well as other expenses.
Infrastructure and Locomotive Tariffs - Other Tariffs represented 4% of the
Group's Total Operating Cash Costs in 2021 and rose 22% year on year to RUB
1,219 million* in 2021, impacted by higher regulated RZD tariffs and
increased costs for relocating rolling stock to and from maintenance.
Engagement of locomotive crews
Costs related to the engagement of locomotive crews from RZD in 2021 (1% of
the Group's Total Operating Cash Costs) declined 30% year on year to RUB 294
million due to the reduction in the amount of outsourcing of locomotive
crews as the Group increased its use of in-house crews.
Expense relating to short-term leases (rolling stock)
In 2021, Expense relating to short-term leases (rolling stock), representing
1% of the Group's Total Operating Cash Costs, fell 67% year on year to RUB
274 million primarily due to the intentional decrease in the number of
leased-in tank cars.
Other Operating Cash Costs
Other Operating Cash Costs (a non-IFRS financial measure) include the
following cost items: "Advertising and promotion", "Auditors' remuneration",
"Communication costs", "Information services", "Legal, consulting and other
professional fees", "Expense relating to short-term leases (tank containers)",
Expense relating to short-term leases (office)", "Taxes (other than income tax
and value added taxes)" and "Other expenses".
The following table provides a breakdown of the Other Operating Cash Costs for the years
ended 31 December 2021 and 2020.
2020 2021 Change
RUB mln RUB mln %
Expense relating to short-term leases (office) 109 99 -10%
Legal, consulting and other professional fees 69 74 7%
Auditors' remuneration 55 57 3%
Advertising and promotion 35 46 32%
Taxes (other than on income and value added taxes) 25 27 11%
Communication costs 26 25 -4%
Expense relating to short-term leases (tank containers) 24 23 -1%
Information services 16 16 5%
Other expenses 675 735 9%
Other Operating Cash Costs 1,034 1,103 7%
Other Operating Cash Costs, which comprised 4% of the Group's Total Operating
Cash Costs, climbed 7% year on year to RUB 1,103 million in 2021.
Total Operating Non-Cash Costs
Total Operating Non-Cash Costs (a non-IFRS financial measure) include the
following cost items: "Depreciation of property, plant and equipment",
"Amortisation of intangible assets", "Loss on derecognition arising on capital
repairs", "Depreciation of right-of-use assets", "Net impairment losses on
trade and other receivables", "Impairment/(reversal of impairment) of
property, plant and equipment" and "Net (gain)/loss on sale of property, plant
and equipment".
The following table provides a breakdown of the Total Operating Non-Cash Costs
for the years ended 31 December 2021 and 2020.
2020 2021 Change
RUB mln RUB mln %
Depreciation of property, plant and equipment 6,969 6,643 -5%
Depreciation of right-of-use assets 655 1,127 72%
Loss on derecognition arising on capital repairs 11 420 484 15%
Net impairment losses on trade and other receivables 6 8 40%
Amortisation of intangible assets 60 0.7 -99%
Net loss/(gain) on sale of property, plant and equipment 0.3 (42) NM
Total Operating Non-Cash Costs 8,109 8,221 1%
A 1% year-on-year increase in Total Operating Non-Cash Costs to RUB 8,221
million in 2021 stemmed primarily from: a 72% year-on-year rise in
Depreciation of right-of-use assets as the Group increased the number of
leased-in gondola cars, a 5% year-on-year decline in Depreciation of property,
plant and equipment and a 99% year-on-year decline in Amortisation of
intangible assets reflecting the full amortisation of intangible assets linked
to the service contract with MMK.
Adjusted EBITDA (non-IFRS financial measure)
EBITDA (a non-IFRS financial measure) represents "Profit for the period"
before "Income tax expense", "Finance costs - net" (excluding "Net foreign
exchange transaction (gains)/losses on financing activities"), "Depreciation
of property, plant and equipment", "Amortisation of intangible assets" and
"Depreciation of right-of-use assets".
Adjusted EBITDA (a non-IFRS financial measure) represents EBITDA excluding
"Net foreign exchange transaction (gains)/losses on financing activities",
"Share of profit/(loss) of associate", "Other gains/(losses) - net", "Net
gain/(loss) on sale of property, plant and equipment", "Impairment/(reversal
of impairment) of property, plant and equipment", "Impairment of intangible
assets", "Loss on derecognition arising on capital repairs" and "Reversal of
impairment of intangible assets".
The Group's 2021 Adjusted EBITDA rose 8% year on year to RUB 29,044 million.
The Adjusted EBITDA Margin widened to 50% in 2021 from 49% in 2020 reflecting
the 6% year-on-year increase in Adjusted Revenue while
Total Operating Cash Costs rose 2% year on year.
The following table provides details on Adjusted EBITDA for the years
ended 31 December 2021 and 2020, and
its reconciliation to EBITDA and Profit for the year.
2020 2021 Change
RUB mln RUB mln %
Profit for the year 12,187 15,100 24%
Plus (Minus)
Income tax expense 4,525 4,338 -4%
Finance costs - net 2,100 2,189 4%
Net foreign exchange transaction gains/(losses) on financing activities 147 (10) NM
Amortisation of intangible assets 60 0.7 -99%
Depreciation of right-of-use assets 655 1,127 72%
Depreciation of property, plant and equipment 6,969 6,643 -5%
EBITDA 26,642 29,388 10%
Minus (Plus)
Loss on derecognition arising on capital repairs (420) (484) 15%
Net foreign exchange transaction gains/(losses) on financing activities 147 (10) NM
Other gains - net 108 796 639%
Net (loss)/gain on sale of property, plant and equipment (0.3) 42 NM
Adjusted EBITDA 26,807 29,044 8%
Finance income and costs
The following table provides a breakdown of Finance income and costs for
the years ended 31 December 2021 and 2020.
2020 2021 Change
RUB mln RUB mln %
Interest expense:
Bank borrowings (1,482) (1,483) 0%
Non-convertible bonds (808) (772) -4%
Interest expenses on loans (5) - -100%
Other interest expense (2) - -100%
Total interest expense calculated using the effective interest rate method (2,298) (2,255) -2%
Leases with financial institutions (74) - -100%
Other lease liabilities (113) (202) 78%
Total interest expense (2,485) (2,457) -1%
Other finance costs (25) (50) 96%
Total finance costs (2,510) (2,507) 0%
Interest income:
Bank balances 190 209 10%
Short term deposits 27 72 166%
Interest income on loans 0.1 3 NM
Total interest income calculated using the effective interest rate method 217 284 31%
Finance leases - related parties - 0.4 NM
Finance leases - third parties 47 42 -12%
Total interest income 264 326 24%
Other finance income - 0.8 NM
Total finance income 264 327 24%
Net foreign exchange transaction (losses)/gains on borrowings and other (6) 3 NM
liabilities
Net foreign exchange transaction gains/(losses) on cash and cash equivalents 153 (12) NM
and other monetary assets
Net foreign exchange transaction gains/(losses) on financing activities 147 (10) NM
Net finance costs (2,100) (2,189) 4%
Finance costs
Total finance costs for 2021 remained unchanged year on year at RUB 2,507
million.
Finance income
In 2021, the Group's Total finance income increased 24% year on year to RUB
327 million primarily due to increases in short term deposits and bank
balances along with the rise in deposit rates over the period.
Net foreign exchange transaction gains/(losses) on financing activities
The Group had Net foreign exchange transaction losses on financing activities
of RUB 10 million in 2021 compared to Net foreign exchange transaction gains
on financing activities of RUB 147 million in 2020. This resulted from foreign
exchange volatility on the available cash and cash equivalents denominated in
foreign currency.
Profit before income tax
The Group reported an increase of 16% in Profit before income tax to RUB
19,438 million in 2021 compared to 2020, reflecting in large part the 15%
year-on-year increase in the Group's Operating profit to RUB 21,627 million,
which was largely linked to the factors described above.
Income tax expense
Income tax expense fell 4% year on year to RUB 4,338 million in 2021 following
a decline in the average tax rate to 22% in 2021 compared to 27% in 2020.
Profit for the year
The 24% year-on-year increase in the Group's Profit for the year to RUB 15,100
million reflected the factors described above.
Profit for the year attributable to the owners of the Company increased 23%
year on year to RUB 12,987 million reflecting the factors described above.
LIQUIDITY AND CAPITAL RESOURCES
In 2021, the Group's capital expenditure consisted principally of maintenance
CAPEX (including capital repairs) and the selective acquisition of fleet.
The Group was able to meet its liquidity and capital expenditure needs through operating cash flow,
available cash and cash equivalents and proceeds from borrowings.
The Group manages its liquidity based on expected cash flows. As at 31
December 2021, the Group had Net Working Capital of RUB 2,571 million*. Given
its anticipated operating cash flow and borrowings, the
Group believes that it has sufficient working capital to operate
successfully.
Cash flows
The following table sets out the principal components of the Group's
consolidated cash flow statement for the years ended 31 December
2021 and 2020.
2020 2021
RUB mln RUB mln
Cash flows from operating activities 26,932 29,104
Changes in working capital: 1,346 954
Inventories 816 620
Trade receivables (427) (139)
Other assets 1,439 (488)
Other receivables 10 23
Trade and other payables (208) 524
Contract liabilities (283) 414
Cash generated from operations 28,278 30,058
Tax paid (3,052) (2,808)
Net cash from operating activities 25,226 27,250
Cash flows from investing activities
Cash inflow from disposal of subsidiary undertakings - net of cash disposed - 1,110
of
Loans granted to third parties - (75)
Loan repayments received from third parties 4 79
Purchases of property, plant and equipment (6,941) (8,439)
Proceeds from sale of property plant and equipment 67 78
Interest received 264 326
Receipts from finance lease receivable 78 108
Other - (41)
Net cash used in investing activities (6,528) (6,854)
Cash flows from financing activities
Net cash inflows from borrowings and financial leases 12 : 1,946 1,521
Proceeds from bank borrowings 23,265 18,058
Repayments of borrowings (19,603) (15,287)
Repayments of non-convertible unsecured bonds - (1,250)
Principal elements of lease payments for leases with financial (1,716) -
institutions
Principal elements of lease payments for other lease liabilities (672) (1,068)
Interest paid on bank borrowings and non-convertible unsecured bonds (2,315) (2,239)
Interest paid on leases with financial institutions (81) -
Interest paid on lease liabilities (114) (183)
Dividends paid to the owners of the Company (16,637) (9,023)
Dividends paid to non-controlling interests in subsidiaries (2,272) (1,225)
Purchase of treasury shares (31) -
Prepayment for acquisition of non-controlling interest - (300)
Payments to non-controlling interest (180) -
Net cash used in financing activities (20,357) (12,517)
Net (decrease)/increase in cash and cash equivalents (1,659) 7,879
Exchange (losses)/gains on cash and cash equivalents 116 (3)
Cash and cash equivalents at beginning of the year 6,522 4,978
Cash and cash equivalents at the end of the year 4,978 12,855
Net cash from operating activities
Net cash from operating activities rose 8% year on year to RUB 27,250 million
due to:
· The increase in Cash generated from operations (after "Changes in
working capital") which increased 6% year on year to RUB 30,058 million
largely due to the 8% year-on-year increase in Cash flows from operating
activities.
· Tax paid was 8% lower year on year at RUB 2,808 million primarily
reflecting the decline in the average tax rate.
Net cash used in investing activities
Net cash used in investing activities increased 5% year on year to RUB 6,854
million largely reflecting:
· A 22% or RUB 1,498 million year-on-year increase in
Purchases of property, plant and equipment (on a cash basis; including
maintenance CAPEX) to RUB 8,439 million. This was primarily due to the
acquisition of 381 tank cars in response to the accelerated post-COVID
recovery in the oil products and oil segment in the second half of 2021 along
with a rise in maintenance CAPEX.
· RUB 1,110 million of cash inflows from the sale of the Group's 60%
stake in the non-core specialised container subsidiary SyntezRail in October
2021.
Net cash used in financing activities
The 39% year-on-year decline in Net cash used in financing activities which
decreased to RUB 12,517 million in 2021, was due to the factors described
below:
· The Group continued refinancing its debt portfolio in 2021 with
repayments of borrowings largely matched by proceeds from borrowings. The net
cash inflows from borrowings and financial leases declined 22% year on year to
RUB 1,521 million in 2021.
· Interest paid (including "Interest paid on bank borrowings and
non-convertible unsecured bonds"
and "Interest paid on leases with financial institutions") was 7%
lower year on year at RUB 2,239 million in 2021.
· Cash outflows in the amount of RUB 300 million related to the
prepayment for the acquisition of the outstanding 40% stake in
BaltTransServis.
· As per the announced targets, the amount of dividends paid to owners
of the Company in 2021 (which includes total final dividends paid in respect
of second half of 2020 and total interim dividends paid in respect of first
half of 2021) declined 46% to RUB 9,023 million largely due to the weak
pricing environment in the gondola segment which continued to the end of first
half of 2021.
· Dividends paid to non-controlling interests in subsidiaries decreased
46% year on year to RUB 1,225 million in 2021 as Globaltrans upstreamed a
lower amount of dividends year on year from its non-wholly owned subsidiaries.
Capital expenditure
Total CAPEX (a non-IFRS financial measure) calculated on a cash basis as the
sum of "Purchases of property, plant and equipment" (which includes
maintenance CAPEX), "Purchases of intangible assets", "Acquisition of
subsidiary undertakings - net of cash acquired" and "Principal elements of
lease payments for leases with financial institutions" (as part of the capital
expenditures was financed with a finance lease).
In 2021 the Group's Total CAPEX (on a cash basis, including maintenance CAPEX)
was 22% or RUB 1,498 million higher year on year at RUB 8,439 million,
reflecting:
· A 14% or RUB 809 million year-on-year increase in Maintenance CAPEX
to RUB 6,612 million* due to a larger number of capital repairs and higher
wheel pairs costs.
· A 60% or RUB 689 million year-on-year increase in Expansion CAPEX (on
a cash basis) to RUB 1,828 million* 13 mainly consisting of the acquisition
of 381 tank cars and 350 specialised containers (compared to the purchase of
300 flat cars and 151 specialised containers in the previous year).
The Group's capital expenditure (including maintenance CAPEX) on an accrual basis was RUB 7,994 million in 2021 (2020: RUB 8,626 million).
The difference between capital expenditure given on a cash basis and on an
accrual basis is principally because of a time lag between
the prepayments for and the delivery of rolling stock.
The following table sets out the principal components of the Group's Total
CAPEX for the years ended 31 December 2021 and 2020.
2020 2021 Change
RUB mln RUB mln %
Purchase of property, plant and equipment 6,941 8,439 22%
Purchase of intangible assets - - -
Total CAPEX 6,941 8,439 22%
Not included
Principal elements of lease payments for leases with financial 1,716 - -
institutions 14
Free Cash Flow
Free Cash Flow (a non-IFRS financial measure) is calculated as "Cash generated
from operations" (after "Changes in working capital") less "Tax paid",
"Purchases of property, plant and equipment" (including maintenance CAPEX),
"Purchases of intangible assets", "Acquisition of subsidiary undertakings -
net of cash acquired", "Principal elements of lease payments for leases with
financial institutions", "Principal elements of lease payments for other lease
liabilities", "Interest paid on other lease liabilities", "Interest paid on
bank borrowings and non-convertible unsecured bonds", "Interest paid on leases
with financial institutions" and "Acquisition of non-controlling interest"
plus "Cash inflow from disposal of subsidiary undertakings - net of cash
disposed of".
Free Cash Flow increased 7% year on year or RUB 1,028 million to RUB 16,131
million in 2021, primarily due to:
· A 6% or RUB 1,779 million year-on-year increase in Cash generated
from operations (after "Changes in working capital") to RUB 30,058 million.
· Total CAPEX (including maintenance CAPEX) of RUB 8,439 million
which was 22% or RUB 1,498 million higher year on year.
· Lower Tax paid, down 8% or RUB 244 million year on year to RUB 2,808
million.
· A 59% or RUB 395 million year-on-year rise in Principal elements of
lease payments for other lease liabilities which rose to RUB 1,068 million as
the Group substantially increased the number of leased-in gondola fleet to
meet the growing demand for its services.
The following table sets out details on Free Cash Flow and Attributable Free Cash Flow for the years
ended 31 December 2021 and 2020, and
its reconciliation to Cash generated from operations.
2020 2021 Change
RUB mln RUB mln %
Cash generated from operations (after "Changes in working capital") 28,278 30,058 6%
Total CAPEX (including maintenance CAPEX) (6,941) (8,439) 22%
Tax paid (3,052) (2,808) -8%
Interest paid on bank borrowings and non-convertible unsecured bonds (2,315) (2,239) -3%
Principal elements of lease payments for other lease liabilities (672) (1,068) 59%
Interest paid on leases with financial institutions (81) - -100%
Interest paid on other lease liabilities (114) (183) 61%
Cash inflow from disposal of subsidiary undertakings - net of cash disposed of - 1,110 NM
Prepayment for acquisition of non-controlling interest - (300) NM
Free Cash Flow(14) 15,103 16,131 7%
Minus
Adjusted Profit Attributable to Non-controlling Interests 1,600 2,113 32%
Attributable Free Cash Flow(14) 13,503 14,018 4%
Capital resources
As of 31 December 2021, the Group's financial indebtedness consisted of
borrowings and non-convertible unsecured bonds for an aggregate principal
amount of RUB 31,318 million (including accrued interest of RUB 398 million*),
a decrease of 2% compared to the end of 2020.
Under IFRS 16, Other lease liabilities (not included in Total debt) of RUB
5,842 million were recognised on the balance sheet as of 31 December 2021 (31
December 2020: RUB 1,405 million) which was primarily related to the long-term
leasing of certain fleet and offices. The increase largely reflects a
significant rise in the number of leased-in gondola cars in response to strong
demand for the Group's services in 2021.
The Group's Net Debt decreased 32% to RUB 18,464 million compared to 31
December 2020 with the Net Debt to Adjusted EBITDA ratio improving to 0.6x
compared to 1.0x at the end of 2020.
The following table sets out details on the Group's total debt, Net Debt and
Net Debt to Adjusted EBITDA at 31 December 2021 and 2020, and the
reconciliation of Net Debt to Total debt.
As of As of Change
31 December 31 December
2020 2021
RUB mln RUB mln %
Total debt 32,015 31,318 -2%
Minus
Cash and cash equivalents 4,978 12,855 158%
Net Debt 27,037 18,464 -32%
Net Debt to Adjusted EBITDA 1.0 0.6 -
Rouble-denominated borrowings accounted for 100% of the Group's debt portfolio
as of 31 December 2021. The Russian rouble is
the functional currency of the Company.
The weighted average effective interest rate rose to 7.5% as of 31 December
2021 (31 December 2020: 6.9%) reflecting a backdrop of higher rates across the
financial markets in Russia. All of the Group's debt had fixed interest rates
as of the end of 2021.
The Group has a balanced maturity profile supported by the Group's cash flow
generation, available cash and cash equivalents, as well as undrawn borrowing
facilities of RUB 42,888 million as of 31 December 2021.
The following table gives the maturity profile of the Group's borrowings
(including accrued interest of RUB 398 million*) as of 31 December 2021.
As of
31 December
2021
RUB mln
Q1 2022 3,318*
Q2 2022 2,631*
Q3 2022 5,473*
Q4 2022 2,246*
2023 11,189*
2024 5,431*
2025 1,031*
Total 31,318
PRESENTATION OF INFORMATION
The information in this announcement is subject to verification, completion
and change. Accordingly, no representation or warranty, express or implied, is
made or given by or on behalf of the Company or any of its shareholders,
directors, officers or employees or any other person as to the accuracy,
completeness or fairness of the information or opinions contained in this
announcement. None of the Company nor any of its shareholders, directors,
officers or any other person accepts any liability whatsoever for any loss
howsoever arising from any use of the contents of this announcement or
otherwise arising in connection therewith. This announcement does not
constitute an offer or an advertisement of any securities in any jurisdiction.
The financial information contained in this announcement is derived from the
consolidated management report and consolidated financial statements (audited)
of Globaltrans Investment PLC (the "Company" and, together with its
subsidiaries, "Globaltrans" or the "Group") and has been prepared in
accordance with International Financial Reporting Standards as adopted by the
European Union and the requirements of Cyprus Companies Law, Cap. 113 ("EU
IFRS").
The Group' consolidated management report and consolidated financial
statements, selected operational information as at and for the years ended 31
December 2021 and 2020 along with historical financial and operational
information are available at Globaltrans' corporate website
(www.globaltrans.com).
The presentation currency of the Group's consolidated financial statements is
the Russian rouble ("RUB"). In this announcement, the Group has used certain
measures not recognised by EU IFRS or IFRS (referred to as "non-IFRS
measures") as supplemental measures of the Group's operating performance. The
management believes that these non-IFRS 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 management accounts is
marked in this announcement with an asterisk {*}.
Information (non-IFRS 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-IFRS measures to the closest EU IFRS measures are
included in the body of this announcement.
Rounding adjustments have been made in calculating some of the financial and
operational information included in this announcement. As a result, numerical
figures shown as totals in some tables may not be exact arithmetic
aggregations of the figures that precede them.
The Group has obtained certain statistical, market and pricing information
that is presented in this announcement on such topics as the Russian freight
rail transportation market and related subjects from the following third-party
sources: Federal State Statistics Service of Russian Federation ("Rosstat"),
JSC Russian Railways ("RZD") and the Federal Antimonopoly Service ("FAS"). The
Group has accurately reproduced such information and, as far as it is aware
and is able to ascertain from information published by such third-party
sources, no facts have been omitted that would render the reproduced
information inaccurate or misleading. The Group has not independently verified
this third-party information. In addition, the official data published by
Russian governmental agencies may be substantially less complete or researched
than that of more developed countries.
All non-IFRS financial and operational information presented in this
announcement should be used only as an analytical tool, and investors should
not consider such information in isolation or in any combination as a
substitute for analysis of the Group's consolidated financial statements and
condensed consolidated interim financial information reported under EU IFRS,
which are available the Globaltrans' corporate website www.globaltrans.com.
DEFINITIONS
Terms that require definitions are marked with capital letters in this
announcement and their definitions
are provided below in alphabetical order:
Adjusted EBITDA (a non-IFRS financial measure) represents EBITDA excluding
"Net foreign exchange transaction (gains)/losses on financing activities",
"Share of profit/(loss) of associate", "Other gains/(losses) - net", "Net
gain/(loss) on sale of property, plant and equipment", "Impairment/(reversal
of impairment) of property, plant and equipment", "Impairment of intangible
assets", "Loss on derecognition arising on capital repairs" and "Reversal of
impairment of intangible assets".
Adjusted EBITDA Margin (a non-IFRS financial measure) is calculated as
Adjusted EBITDA divided by Adjusted Revenue.
Adjusted Profit Attributable to Non-controlling Interests (a non-IFRS
financial measure) is calculated as "Profit attributable to non-controlling
interests" less share of "Impairment of property, plant and equipment" and
"Impairment of intangible assets" attributable to non-controlling interests.
Adjusted Revenue (a non-IFRS financial measure) is calculated as "Total
revenue" less the following "pass through" items "Infrastructure and
locomotive tariffs: loaded trips" and "Services provided by other
transportation organisations".
Attributable Free Cash Flow (a non-IFRS financial measure) means Free Cash
Flow less Adjusted Profit Attributable to Non-controlling Interests.
Average Distance of Loaded Trip is calculated as the sum of the distances of
all loaded trips for a period divided by the number of loaded trips for the
same period.
Average Number of Loaded Trips per Railcar is calculated as total number of
loaded trips in the relevant period divided by Average Rolling Stock Operated.
Average Price per Trip is calculated as Net Revenue from Operation of Rolling
Stock divided by the total number of loaded trips during the relevant period
in the respective currency.
Average Rolling Stock Operated is calculated as the average weighted (by days)
number of rolling stock available for operator services (not including rolling
stock in maintenance, purchased rolling stock in transition to its first place
of commercial utilisation, rolling stock leased out, Engaged Fleet, flat cars
and containers used in specialised container transportation).
EBITDA (a non-IFRS financial measure) represents "Profit for the period"
before "Income tax expense", "Finance costs - net" (excluding "Net foreign
exchange transaction (gains)/losses on financing activities"), "Depreciation
of property, plant and equipment", "Amortisation of intangible assets" and
"Depreciation of right- of-use assets".
Empty Run or Empty Runs means the movement of railcars without cargo for the
whole or a substantial part of the journey.
Empty Run Costs (a non-IFRS financial measure meaning costs payable to RZD
for forwarding empty railcars) is derived from management accounts and
presented as part of the "Infrastructure and locomotive tariffs: empty run
trips and other tariffs" component of "Cost of sales" reported under EU IFRS.
Empty Run Costs do not include costs of relocation of rolling stock to and
from maintenance, purchased rolling stock in transition to its first place of
commercial utilisation, rolling stock leased in or leased out, Engaged Fleet,
flat cars and containers used in specialised container transportation.
Empty Run Ratio is calculated as the total of empty trips in kilometres by
respective rolling stock type divided by total loaded trips in kilometres of
such rolling stock type. Empty trips are only applicable to rolling stock
operated (not including rolling stock in maintenance, purchased rolling stock
in transition to its first place of commercial utilisation, rolling stock
leased out, Engaged Fleet, flat cars and containers used in specialised
container transportation).
Engaged Fleet is defined as rolling stock subcontracted or otherwise engaged
from a third-party rail operator for a loaded trip from the point of
origination to the cargo's destination, at which point the railcar is then
released to such third-party.
Free Cash Flow (a non-IFRS financial measure) is calculated as "Cash generated
from operations" (after "Changes in working capital") less "Tax paid",
"Purchases of property, plant and equipment" (including maintenance CAPEX),
"Purchases of intangible assets", "Acquisition of subsidiary undertakings -
net of cash acquired", "Principal elements of lease payments for leases with
financial institutions", "Principal elements of lease payments for other lease
liabilities", "Interest paid on other lease liabilities", "Interest paid on
bank borrowings and non-convertible unsecured bonds", "Interest paid on leases
with financial institutions" and "Acquisition of non-controlling interest"
plus "Cash inflow from disposal of subsidiary undertakings - net of cash
disposed of".
Freight Rail Turnover is a measure of freight carriage activity over a
particular period calculated as the sum of tonnage of each loaded trip
multiplied by the distance of each loaded trip, expressed in tonnes-km. It
excludes volumes transported by Engaged Fleet (unless otherwise stated) and
the performance of the specialised container transportation business.
Infrastructure and Locomotive Tariffs - Other Tariffs (a non-IFRS
financial measure, derived from management accounts) is presented as part of
the ''Infrastructure and locomotive tariffs: empty run trips and other
tariffs'' component of "Cost of sales" reported under EU IFRS. This cost item
includes the costs of relocation of rolling stock to and from maintenance,
transition of purchased rolling stock to its first place of commercial
utilisation, and relocation of rolling stock in and from lease operations, as
well as other expenses.
Leased-in Fleet is defined as fleet leased in under operating leases,
including railcars, locomotives and specialised containers.
Leased-out Fleet is defined as fleet leased out to third parties under
operating leases (excluding flat cars and containers used in specialised
container transportation).
Leverage Ratio or Net Debt to Adjusted EBITDA (a non-IFRS financial measure)
is the ratio of Net Debt on the last day of a particular financial period to
Adjusted EBITDA in respect of the twelve months to the end of that same
period.
Net Debt (a non-IFRS financial measure) is defined as the sum of total
borrowings (including interest accrued) less "Cash and cash equivalents".
Net Revenue from Engaged Fleet (a non-IFRS financial measure, derived from
management accounts) represents the net sum of the price charged for
transportation to clients by the Group utilising Engaged Fleet less the loaded
railway tariffs charged by RZD (included in the EU IFRS line item
"Infrastructure and locomotive tariffs: loaded trips") less the cost of
attracting fleet from third-party operators (included in the EU IFRS line item
"Services provided by other transportation organisations").
Net Revenue from Operation of Rolling Stock is a non-IFRS financial measure,
derived from management accounts, describing the net revenue generated from
freight rail transportation services which is adjusted for respective "pass
through" loaded railway tariffs charged by RZD (included in the EU IFRS line
item "Infrastructure and locomotive tariffs: loaded trips").
Net Revenue from Specialised Container Transportation is a non-IFRS financial
measure, derived from management accounts, that represents the revenue
generated from the specialised container operations (included in the EU IFRS
line item: "Revenue from specialised container transportation") less the
respective "pass through" loaded railway tariffs charged by RZD (included in
the EU IFRS line item "Infrastructure and locomotive tariffs: loaded trips").
Net Working Capital (a non-IFRS financial measure) is calculated as the sum of
the current portions of "Inventories", "Current income tax assets", "Trade
receivables - net", "Other receivables - net" ("Other receivables - third
parties" and "Other receivables - related parties" net of "Provision for
impairment of other receivables"), "Prepayments - third parties", "Prepayments
- related parties" and "VAT recoverable", less the sum of the current portions
of "Trade payables to third parties", "Trade payables to related parties",
"Other payables to third parties", "Other payables to related parties",
"Accrued expenses", "Accrued key management compensation, including
share-based payment", "VAT payable and other taxes", "Contract liabilities"
and "Current tax liabilities".
Other Operating Cash Costs (a non-IFRS financial measure) include the
following cost items: "Advertising and promotion", "Auditors' remuneration",
"Communication costs", "Information services", "Legal, consulting and other
professional fees", "Expense relating to short-term leases - tank containers",
"Expense relating to short- term leases (office)", "Taxes (other than income
tax and value added taxes)" and "Other expenses".
Owned Fleet is defined as the fleet owned and leased in under finance lease as
at the end of the reporting period. It includes railcars, locomotives and
specialised containers, unless otherwise stated, and excludes Engaged Fleet.
Share of Empty Run Kilometres paid by Globaltrans is defined as the percentage
of empty run kilometres paid by Globaltrans divided by the total amount of
empty run kilometres incurred by the fleet operated by Globaltrans (not
including relocation of rolling stock to and from maintenance, purchased
rolling stock in transition to its first place of commercial utilisation, and
rolling stock leased-out, Engaged Fleet, flat cars and containers used in
specialised container transportation) in the relevant period.
Total CAPEX (a non-IFRS financial measure) calculated on a cash basis as the
sum of "Purchases of property, plant and equipment" (which includes
maintenance CAPEX), "Purchases of intangible assets", "Acquisition of
subsidiary undertakings - net of cash acquired" and "Principal elements of
lease payments for leases with financial institutions" (as part of the capital
expenditures was financed with a finance lease).
Total Empty Run Ratio is calculated as total kilometres travelled empty
divided by the total kilometres travelled loaded by the rolling stock fleet
operated by Globaltrans (not including the relocation of rolling stock to and
from maintenance, purchased rolling stock in transition to its first place of
commercial utilisation, or rolling stock leased out, Engaged Fleet, flat cars
and containers used in specialised container transportation) in the relevant
period.
Total Fleet is defined as the fleet owned and leased in under finance and
operating leases as at the end of reporting period. It includes railcars,
locomotives and specialised containers, unless otherwise stated, and excludes
Engaged Fleet.
Total Operating Cash Costs (a non-IFRS financial measure) represent operating
cost items payable in cash and calculated as "Total cost of sales, selling and
marketing costs and administrative expenses" less the "pass through" items:
"Infrastructure and locomotive tariffs: loaded trips" and "Services provided
by other transportation organisations" and non-cash items: "Depreciation of
property, plant and equipment", "Amortisation of intangible assets",
"Depreciation of right-of-use assets", "Loss on derecognition arising on
capital repairs", "Net impairment losses on trade and other receivables",
"Impairment/(reversal of impairment) of property, plant and equipment" and
"Net (gain)/loss on sale of property, plant and equipment".
Total Operating Non-Cash Costs (a non-IFRS financial measure) include the
following cost items: "Depreciation of property, plant and equipment",
"Amortisation of intangible assets", "Depreciation of right-of- use assets",
"Loss on derecognition arising on capital repairs", "Net impairment losses on
trade and other receivables", "Impairment/(reversal of impairment) of
property, plant and equipment " and "Net (gain)/loss on sale of property,
plant and equipment".
Transportation Volume is a measure of freight carriage activity over a
particular period, measuring weight of cargo carried in tonnes. It excludes
volumes transported by Engaged Fleet (unless otherwise stated) and volumes
related to the specialised container transportation business.
LEGAL DISCLAIMER
Information contained in this announcement concerning Globaltrans Investment
PLC, a company organised and existing under the laws of Cyprus (the "Company"
and together with its consolidated subsidiaries "Globaltrans" or the "Group")
is for general information purposes only. The opinions presented herein are
based on general information gathered at the time of writing and are subject
to change without notice. The Company relies on information obtained from
sources believed to be reliable but does not guarantee the accuracy or
completeness of such information.
The information in this announcement is subject to verification, completion
and change. Accordingly, no representation or warranty, express or implied, is
made or given by or on behalf of the Company or any of its shareholders,
directors, officers or employees or any other person as to the accuracy,
completeness or fairness of the information or opinions contained in this
announcement. None of the Company nor any of its shareholders, directors,
officers or any other person accepts any liability whatsoever for any loss
howsoever arising from any use of the contents of this announcement or
otherwise arising in connection therewith.
This announcement may contain 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", "estimate",
"anticipate", "intend", "will", "could", "may", or "might", the negative of
such terms or other similar expressions. These forward-looking statements
include matters that are not historical facts and statements regarding the
Company's intentions, beliefs or current expectations concerning, among other
things, Globaltrans' results of operations, financial condition, liquidity,
prospects, growth, strategies, and the industry in which the Company operates.
By their nature, forward looking statements involve risks and uncertainties,
because they relate to events and depend on circumstances that may or may not
occur in the future. The Company cautions you that forward-looking statements
are not guarantees of future performance and that Globaltrans' actual results
of operations, financial condition, liquidity, prospects, growth, strategies
and the development of the industry in which Globaltrans operates may differ
materially from those described in or suggested by the forward-looking
statements contained in this announcement. In addition, even if Globaltrans'
results of operations, financial condition, liquidity, prospects, growth
strategies and the development of the industry in which the Company operates
are consistent with the forward-looking statements contained in this
announcement, those results or developments may not be indicative of results
or developments in future periods. The Company does not intend to update this
announcement or reflect events and circumstances occurring after the date
hereof or to reflect the occurrence of unanticipated events. Many factors
could cause actual results to differ materially from those contained in
forward-looking statements of Globaltrans, including, among others, general
economic conditions, the competitive environment, risks associated with
operating in Russia, market changes in the Russian freight rail market, as
well as many of the risks specifically related to Globaltrans and its
operations. No reliance may be placed for any purposes whatsoever on the
information contained in this announcement or on its completeness, accuracy or
fairness.
1 Including 5,471 units leased in from other Group subsidiaries and 1,693
units leased in from third parties.
2 Based on estimated financial results of SyntezRail for 2021, normalised
assuming that all 500 new specialised containers delivered in 2021 were
operational from 1 January 2021 and excluding the impact of IFRS 16.
3 Global Depositary Receipt.
4 The Group's Transportation Volumes (excluding Engaged Fleet) decreased 4%
year on year in 2021 and were up 1% in H2 2021 compared to H1 2021.
5 Estimated by the Company. Net change in Russia's overall fleet of gondola
cars as of 31 December 2021 compared to the end of 2020.
6 Estimated by the Company. Net change in Russia's overall fleet of oil
products and oil tank cars as of 31 December 2021 compared to the end of 2020.
7 The Programme is for the Company's GDRs listed on the Main Market of the
London Stock Exchange and the Moscow Exchange and is executed under the
authority that was granted by shareholders at the AGM held on 29 April 2021.
This authority lasts for a period of twelve months from that date and permits
the Company to repurchase a total number of GDRs not to exceed 5% of the
Company's share capital (equivalent to 8,937,046 shares, with each GDR
representing one ordinary share). The actual number of GDRs repurchased by the
Company will depend on market conditions.
8 Imposed suspension of GDRs trading on the London Stock Exchange and
Moscow Exchange continued as of the date of publication.
9 Includes "Infrastructure and locomotive tariffs: loaded trips" for 2021 of
RUB 12,964 million (2020: RUB 10,957 million) and "Services provided by other
transportation organisations" of RUB 1,695 million (2020: RUB 2,476 million).
10 Under contracts where the RZD tariff is borne by the Group, the Group has
a contractual relationship with the client. The Group sets the terms of the
transactions, such as selling and payment terms and, in some cases, bears
credit risk and controls the flow of receipts and payments.
11 The cost of each major periodic capital repair (including the replacement
of significant components) is recognised in the carrying amount of the
relevant item of rolling stock repaired and separately depreciated.
Simultaneously, the carrying amount of the repaired rolling stock that is
attributable to the previous periodic capital repair and/or significant
component replacement, if any, is derecognised and debited in "Cost of sales"
in the income statement as "Loss on derecognition arising on capital repairs"
for the period during which the repair was carried out.
12 Net cash inflows (outflows) from borrowings and financial leases (a
non-IFRS financial measure) is defined as the balance between the following
line items: "Proceeds from bank borrowings", "Proceeds from issue of
non-convertible unsecured bonds", "Repayments of borrowings" and "Principal
elements of lease payments for leases with financial institutions".
13 Including "Purchases of intangible assets".
14 Free Cash Flow, Attributable Free Cash Flow and Total CAPEX are presented
net of principal elements of lease payments for leases with financial
institutions for 2020. During the first six months of 2020 the entire
financial lease portfolio was refinanced to bilateral loans, therefore
principal elements of lease payments were eliminated.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAPDXAELAEFARecent news on Globaltrans Investment
See all newsREG - Globaltrans Inv PLC - Results of AGM
AnnouncementREG - Globaltrans Inv PLC - Publication of Annual Report for 2023
AnnouncementREG - Globaltrans Inv PLC - Notice of AGM
AnnouncementREG - Globaltrans Inv PLC - Full-Year 2023 Results
AnnouncementREG - Globaltrans Inv PLC - Results of EGM
Announcement