OREANDA-NEWS. December 29, 2012. NCSP Group (LSE: NCSP, Moscow Exchange: NMTP) reports its consolidated IFRS financial results for the 9 months ended 30 September 2012.

9M 2012 Operating and Financial Highlights

 ¤                 The Group’s total cargo turnover in the reporting period increased 3.5% year-on-year
(y-o-y) reaching 121 mln tonnes

 ¤                 Revenue amounted to USD 786 mln, an increase of 0.5% y-o-y

 ¤                 EBITDA(1) increased by 16.1% y-o-y to USD 469 mln

 ¤                 EBITDA margin improved substantially from 52% to 60%

 ¤                 Net Profit more than quadrupled y-o-y and reached USD 320 mln

 ¤                 Net debt(2) / LTM EBITDA(3) declined from 4.3x as of the beginning of the year to 3.5x on 30 September 2012

USD mln or %, unless stated otherwise

9M 2012

9M 2011

Change, %

Revenue

785.9

782.0

0.5%

Gross profit

466.5

403.1

15.7%

EBITDA

468.8

403.8

16.1%

EBITDA margin,%

59.7%

51.6%

8.1 p.p.

Net Profit

319.7

71.8

345.3%

Operating Cash Flow

344.1

199.2

72.7%

Capital expenditure

40.8

66.9

(39.0%)

  

30 September 2012

31 December 2011

  

Net Debt

2,142.0

2,378.7

(10.0%)

LTM EBITDA

615.3

550.3

11.8%

Net Debt / LTM EBITDA

3.5x

4.3x

(18.6%)

1) EBITDA is calculated as profit for the period before finance costs, income tax and D&A, interest income and foreign exchange gain/(loss), net.

2) Net debt is calculated as Total debt less Cash & cash equivalents.

3) LTM EBITDA is calculated as EBITDA for the twelve months preceding the end of the reporting period.

NCSP Group CEO Rado Antolovic said:  °During the first 9 months of the year we continued to demonstrate solid performance in challenging market and weather conditions. We achieved a strong EBITDA by increasing throughput of high margin cargoes, namely grain and containers, and by strictly controlling costs

 °Steady operating cash flow of over USD 344 mln contributed to our sound financial position and a continued decrease in our net debt levels. As at 30 September 2012, net debt totalled USD 2,142 mln, a 10% decrease from the beginning of 2012.

 °NCSP Group enjoys a diverse cargo base, which enables us to quickly respond to changes in the market environment and maintain stable cargo throughput despite seasonal fluctuations or specific market segment downturns. Taking this as our fundamental advantage, we continuously seek to utilize our full potential to achieve better efficiency, renovate handling equipment, and add new capacities to capitalize on the fastest growing cargoes like containers.

 °Our results for the first 9 months of 2012 reflect the underlying robustness of our business, and our successful efforts to improve operational efficiency, but macroeconomic uncertainty still remains a significant factor for the future. Looking forward, we retain our stance of cautious optimism. ±

9M 2012 Operational Highlights

Total cargo turnover for 9M 2012 increased by 3.5% year-on-year and amounted to 121.3 mln tonnes. The flexibility of NCSP Group’s cargo base and universal nature of its port assets allowed the Group to offset the impact of volatile commodities markets and summer restrictions on railway deliveries to Novorossiysk Port caused by flooding in the Krasnodar region in July 2012.

9M 2012 cargo turnover

ths. tonnes

9 months ended

30 September

Change, ths. tonnes

Change,  %

2012

2011(4)

Total

121,347.9

117,233.8

4,114.1

3.5%

including

  

  

  

  

Liquid cargo

99,979.9

97,625.3

2,354.6

2.4%

Bulk cargo

9,381.5

8,927.9

453.6

5.1%

General cargo

8,171.1

7,000.3

1,170.8

16.7%

Containers

3,815.4

3,680.3

135.1

3.7%

Containers, ths. TEU

465.4

447.7

17.7

4.0%

4) Volumes for PTP are included from 1 January 2011

Transhipment of crude oil in January-September 2012 amounted to 85.4 million tonnes, up 1.3% y-o-y. Handling of oil products grew by 7.2% to 13.9 million tonnes.

Total grain throughput in the reported period amounted to 6.4 million tonnes (an increase of 110.5% y-o-y) with very strong volumes in August and September.

Solid growth in ferrous metals (up 21.1% y-o-y to 6.5 million tonnes) and growth in other cargoes partially compensated for lower volumes of iron ore and mineral fertilizers.

To further diversify its cargo base, the Group started handling coal in August, which has been the major driver of turnover growth at Russian ports this year. In the reporting period, coal throughput totalled 63 thousand tonnes.

9M 2012 Financial Results

Revenue in the reporting period was almost flat y-o-y at USD 786 mln. Revenue from handling grain, ferrous metals and containers demonstrated the most impressive growth, increasing 104.3%, 22.1% and 19.5% y-o-y, respectively.

The slight y-o-y decline in stevedoring services revenue was mainly due to a 35% decrease in low-margin bunkering operations.

USD mln or %

9M 2012

9M 2011

Change, %

Revenue

785.9

782.0

0.5%

of which   

  

  

  

Stevedoring services

630.2

638.4

(1.3%)

Crude oil

218.1

215.6

1.2%

Bunkering

111.6

170.7

(34.6%)

Grain

95.8

46.9

104.3%

Oil products

67.0

67.7

(1.0%)

Ferrous metals

55.9

45.8

22.1%

Containers

39.3

32.9

19.5%

Ore and ore concentrate

6.7

12.8

(47.7%)

Other cargoes

35.8

46.0

(22.2%)

Additional port services

68.1

63.7

6.9

Fleet services

76.4

68.0

12.4

Other

11.2

11.9

(5.9%)

During 9M 2012 the Group’s cost of services declined 15.7% y-o-y to USD 319.4 mln, while SG&A increased slightly compared to 9M 2011, amounting to USD 57.1 mln. The decline in cost of services was primarily driven by a decrease in fuel costs from USD 172 mln to USD 107 mln (down 37.8% y-o-y) due to the reduction of bunkering operations and cost control measures.   

USD mln or %

9M 2012

9M 2011

Change, %

Cost of services

319.4

379.0

(15.7%)

SG&A

57.1

54.7

4.4%

Total

376.5

433.7

(13.2%)

NCSP Group’s EBITDA increased materially from USD 404 mln during 9M 2011 to USD 469 mln during 9M 2012, primarily driven by a decrease in low-margin bunkering services.   EBITDA margin approached a best-in-class level of 60%.

The effect of the strengthening of the Russian rouble against US dollar during January-September 2012 on the Group’s assets and liabilities denominated in foreign currency resulted in a foreign exchange gain of USD 96 mln for the reporting period (vs. a foreign exchange loss of USD 150 mln during 9M 2011). Combined with stronger EBITDA performance, this drove Net Profit to USD 320 mln (a 345% increase y-o-y).

The Group’s cash flow from operations increased by 73% y-o-y to USD 344 mln for 9M 2012.   Capital expenditure for the period was USD 41 mln, vs. USD 67 mln during 9M 2011.   The increase in free cash flow brought NCSP Group’s net debt down to USD 2,142 mln as at 30 September 2012 from USD 2,379 mln as at 31 December 2011. The Group’s net debt/LTM EBITDA ratio reached 3.5x, substantially down from 4.3x as of the beginning of 2012.