OREANDA-NEWS. NCSP Group (LSE: NCSP, Moscow Exchange: NMTP) reports its audited consolidated IFRS financial results for the full year ended 31 December 2012.

2012 Operating and Financial Highlights

The Group’s total cargo turnover in the reporting period increased by 1.9 mln tonnes, or 1.2%, year-on-year (y-o-y) reaching 159 mln tonnes;

Revenue for 2012 amounted to USD 1,034 mln;

EBITDA increased by 7.4% y-o-y from USD 550.1 mln in 2011 to USD 591.5 mln in 2012;

EBITDA margin improved from 52.5% for 2011 to 57.2% for 2012;

Investments under the Group’s development programme amounted to USD 89.3 mln;

Gross debt decreased by 10% from USD 2,506 mln to USD 2,262 mln as of 31 December 2012;

Net debt / LTM EBITDA declined from 3.4x on 31 December 2012.

NCSP Group Acting CEO Yuriy Matvienko said: “In 2012 the Group faced exceptionally difficult market and weather conditions, including several long storms and flooding in the Krasnodar region. Nonetheless we were able to not just maintain, but to increase cargo handling. This had a positive impact on our financial results, including strong EBITDA growth.”

FY 2012 Operational Highlights

Total cargo turnover for 2012 increased by 1.2% year-on-year and amounted to 158.9 mln tonnes. In certain cargoes like oil products, ferrous metals and grain the Group’s volumes grew at a faster pace than the market. In August 2012 NCSP Group began handling coal, one of the fastest-growing cargoes by volume in the Russian market, thus further diversifying its cargo base. The universal nature of the Group’s assets helped to mitigate the negative effects of volatile global markets, and to compensate for declines in volumes of certain cargoes by increasing handling of others experiencing stronger demand.

FY 2012 Financial Results

Revenue in the reporting period was USD 1,033.7 mln. One of the main factors driving revenue performance was the decrease in volumes of fuel purchased and resold for bunkering operations, as well as a decrease in revenues from oil handling by USD 6.7 mln as a result of a reduction in volumnes by 2.6 mln tonnes.

This decrease was partly compensated by growth in revenue from handling of ferrous metals, oil products and containers, which increased y-o-y by USD 14.7 mln, USD 7.4 mln and USD 7.4 mln, respectively. The lifting of the grain export embargo from July 2011 also supported y-o-y performance, with grain handling revenue up USD 30.9 mln in 2012.

During 2012 the Group’s cost of services declined by USD 60 mln, or 12.1%, y-o-y. The decline in cost of services was primarily driven by a USD 72 mln decrease in fuel costs due to the reduction of bunkering operations.

SG&A costs amounted to USD 87.5 mln, increasing 12.0% y-o-y. The increase was primarily driven by personnel expenses after the implementation of a new remuneration plan.

In 2012, EBITDA increased to USD 592 mln from USD 551 mln for 2011. EBITDA margin grew to 57% from 52% a year ago, primarily due to growth in high margin cargos and increased capacity.

The main contributor to EBITDA growth was a USD 45 mln effect from increased cargo handling. EBITDA as a result of changes to bunkering margins amounted to USD 4.4 mln. The positive impact on EBITDA from growth in additional port services was USD 13.7 mln. The addition of new capacities also increased EBITDA by USD 11.9 mln. Net changes to cost of services (excluding bunkering and grain) had a negative effect of USD 33.5 mln on EBITDA.

Strong EBITDA performance drove net profit up to USD 316 mln for 2012. The effect of the strengthening of the Russian rouble against US dollar during 2012 on the Group’s assets and liabilities denominated in foreign currency resulted in a foreign exchange gain of USD 130 mln for the reporting period (vs. a foreign exchange loss of USD 168 mln in 2011).

NCSP Group’s gross debt decreased to USD 2,262 mln as at 31 December 2012 from USD 2,506 mln as at 31 December 2011. The Group’s net debt/EBITDA ratio reached 3.4x as of 31 December 2012, substantially down from 4.3x as of the beginning of 2012, which is fully in line with the obligations to the financial covenants in the Group’s loan agreements