OREANDA-NEWS. July 07, 2010. Novorossiysk Commercial Sea Port (LSE: NCSP, RTS and MICEX: NMTP) announces interim condensed consolidated financial results (unaudited) for the three months ended 31 March 2010 in accordance with International Financial Reporting Standards (IFRS).

The full text of interim condensed consolidated financial statements (unaudited) for the three months ended 31 March 2010 of the NCSP Group are available on the Group’s website at: http://nmtp.info/en/ncsp/investors/

Key financial indicators of the Group (USD ‘000)

 

3 months 2010

3 months 2009

Change %

Revenue

175,515

157,130

11.70%

Gross Profit

116,265

112,625

3.23%

EBITDA Adjusted*

121,384

114,197

6.29%

Operating Profit

104,468

101,647

2.78%

Finance Costs

(6,776)

(8,970)

(24.46%)

Net Profit

83,941

33,732

148.85%

Net Profit Adjusted*

82,442

75,386

9.36%

Earnings per share, basic and diluted, USD

0.0043

0.0016

168.75%

Investments* (excluding maintenance CAPEX)

4,707

1,618

190.91%

Cargo turnover* (thousand tons)

21,504.7

20,937.4

2.71%

Net debt*

47,425

127,943

(62.93%)

Net Debt* / EBITDA Adjusted* (annualized)

0.10

0.28

(65.13%)

* The amount is either a non-IFRS measure or according to management reporting data
Commenting on NCSP Group financial results for the three months of 2010, PJSC NCSP Chairman of the Board Alexander Ponomarenko said: "Rebound of container traffic in Q1 2010 supported by growing exports of ferrous metals, grain, and timber, compensated for the negative effect of currency exchange rates volatility and secured positive growth rates of financial indicators in the reporting period".
Revenue
NCSP Group consolidated revenue for three months of 2010 increased by USD 18.4 million reaching USD 175.5 million total. This 11.7% gain in the Group’s consolidate revenue for the first three months of 2010 versus the first three months of 2009 comes as balance of various factors at play.

in thousand USD

3 months 2010

3 months 2009

Change, %

Total, including:

175,515

157,130

11.7%

Stevedoring services

138,766

118,289

17.3%

Additional port services

21,926

25,510

-14.0%

Fleet services

12,242

11,355

7.8%

Ship repair services

3

57

-94.7%

Other

2,578

1,919

34.3%

Revenue from stevedoring services (transshipment of liquid, bulk, general and container cargo, including bunkering) in the reporting period grew by USD 20.5 million (17.3%). Growth of cargo turnover and structural changes in the cargo mix, including increase of grain volumes by 134.9* thousand tons, ferrous metals by 304.1* thousand tons, containers by 25.5* thousand TEU, and timber by 188.5* thousand cubic meters, generated USD 13.3* million of additional revenue, which fully offsets a decrease of iron ore revenue due to a drop in volumes. Revenue from bunkering operations increased by USD 7.2* million in Q1 2010 versus same period last year due to increase of bunkering fuel prices (both purchase and resale price).

Revenue from additional port services (forwarding, storage, customs documentation, repacking, etc) for the first three months of 2010 dropped by USD 3.6 million (14.0%), which is due largely to shorter storage times of cargo like containers and ferrous metals at the port. On the other hand, the shortening of storage times creates potential for increasing the throughput capacity of the port.

Revenue from fleet services in the reporting period increased by USD 0.9 million (7.8%) thanks to growth in volumes of these services.

Revenue from ship repair services in the first three months of 2010 was insignificant due to the fact that works for external clients, executed during the reporting period, will be completed later.

In Q1 2010 revenue from other services (rental services, external sales of electric power and utility services) denominated in rubles increased by USD 0.7 million (34.3%) in dollar terms, mostly due to changes in the exchange rate of the presentation currency.

Cost of production

The full cost of production (cost of services + selling, general and administrative expenses) totaled USD 71.2 million for the three months of 2010 versus USD 55.4 million for the same period of 2009.

The key factors contributing to a growth in the full cost of production for the Group were:

- Growing prices for fuel oil and diesel fuel, procured for bunkering operations of the Group, caused the cost of production to increase by USD 6.6* million;

- Appreciation of the Russian ruble against the representation currency (US dollar) in Q1 2010 versus Q1 2009 increased the full cost of production by another USD 6.2* million;

- Increase of the depreciation charge and maintenance CAPEX on equipment installed under Phase 1 of the Group’s investment program has also contributed USD 3.0* million to cost of production growth.

EBITDA Adjusted

In order to provide comparability of the data for Q1 2010 and Q1 2009, the calculation of EBITDA for both periods was adjusted for exchange rate differences on assets and liabilities nominated in foreign currency, which result from the fluctuations of the ruble-dollar exchange rates, and for interest income on deposits.

EBITDA adjusted for the three months of 2010 comprised USD 121.4* million versus USD 114.2* million for the same period last year.

Positive dynamics of EBITDA adjusted was formed by a complex of positive and negative factors:

- Changes in the cargo mix and growth in volumes resulted in an USD 11.0* million gain in EBITDA adjusted in the reporting period;

- Growing volumes of bunkering services increased EBITDA adjusted by another USD 0.6* million;

- A decrease in volumes of additional port services reduced EBITDA adjusted by USD 2.4* million;

- Foreign exchange differences (appreciation of the Russian ruble against the US dollar (the representation currency) in Q1 2010 as compared to Q1 2009), as well as growth in the total cost of production (mostly increase in maintenance CAPEX) conditioned the decrease of EBITDA Adjusted by another USD 2.1* million.

Adjusted Net Profit

In order to provide comparability of the data for Q1 2010 and Q1 2009, the calculation of the net profit for both periods has to be adjusted for foreign exchange gains/losses and their effect on the profit tax.

Taking into account the above, adjusted net profit in the reporting period totaled USD 82.4* million versus USD 75.4* million in Q1 2009.

Credit burden and net debt

NCSP Group debt on loans and other borrowing totaled USD 455.7 million as of 31 March 2010, of which the current portion of long-term loans due within 12 months from the reporting date comprised USD 134.6 million. Group’s short-term debt increased due to the upcoming scheduled repayment of the USD 118.0 million syndicated loan facility in July this year. In the reporting period NCSP Group neither attracted new debt, nor refinanced existing loans.

Net debt as of the reporting date totaled USD 47.4* million, taking into account the monetary resources at the company’s disposal:

- Cash and cash equivalents – USD 145.1 million;

- Deposits maturing in more than three but less than 12 months – USD 263.2 million.

Thus the Net debt to EBITDA adjusted ratio comprised 0.10* by the end of Q1 2010.

As at 31 March 2010, the average effective borrowing rate was 6.64% per annum versus 6.67% per annum as at 31 December 2009.

The Group’s borrowings as of 31 March of 2010 are repayable as follows:

in thousand USD

Capital element

Contractual interest liability

Total, of which:

455,683

50,857

Due within three months

8,123

12,623

Due from three to six months

118,436

1,102

Due from six to 12 months

8,015

12,181

Between 1 to 2 years

23,124

22,247

Between 2 to 5 years

297,985

2,704