OREANDA-NEWS. FESCO Transportation Group (MOEX: FESH) provides a trading update with the operational and consolidated financial results as per IFRS for the three month and six month periods ended June 30, 2014.

Highlights:

- In 1H2014, the Group continued to increase its container transportation and handling volumes securing the leadership position in Russian Far East by container shipping via sea lines and import container throughput at Port

- Container throughput at Port increased by 8.4% YoY in 1H2014 strongly outperforming the Far East market, with the Port of Vladivostok market share in import container handling reaching 41%

- Continued growth in export in 1H2014 seen as a sustainable trend across all steps of transportation chain

- Despite the container volumes growth the Group's financial results experienced downward pressure from RUB devaluation and decreased rates and tariffs. In 1H2014, Group's consolidated revenue in USD declined by 8.0% YoY to USD 513.1m. Consolidated revenue in RUB grew by 3.5% YoY to RUB 17,947m. 1H2014 EBITDA reached USD 68.3m, down 31.3% YoY

- 1H2014 Group's consolidated EBITDA excluding one-offs amounted to USD 74.3m

- The Group continued the optimization of its vessels and railcars fleet

- The Group announced acquisition of an inland container terminal in Novosibirsk for total consideration of USD 8m

- Total cash spend for CAPEX in 1H2014 (including USD 2.4m paid as advance for terminal in Novosibirsk) remains at relatively low level amounting to USD 36.3m in 1H2014. Net cash CAPEX after proceeds from disposal of fixed assets equals to USD 27.3m

Divisional Performance Highlights

Port Division

- Container throughput in 1H2014 up by 8.4% YoY with import container throughput growth of 11.2% YoY

- Significant growth of 20.4% YoY in general cargo throughput volumes with ferrous metals growth of 50% YoY in 1H2014

- In 1H2014, revenue in RUB increased by 2.6% YoY with EBITDA in RUB decreased by 2.3% YoY. Revenue and EBITDA in USD decreased by 8.5% YoY and 12.3% YoY respectively due to RUB devaluation

- The liberalization of customs procedures in 2Q2014 resulted in decrease in average container tariffs by 16.5%YoY in USD (driven by lower revenue from storage and auxiliary services) and contributed to relative weakening of Port performance in the short term

Rail Division

- Rail container transportation volumes in 1H2014 up by 8.1% YoY to 147,338 TEU driven by expansion of Transgarant fleet by 562 fitting platforms YoY

- The number of container block trains increased by 7% YoY (from 523 to 558) driven by growing demand for the service

- Low single-digit decrease in non-container cargo load due to decline in coal transportation volumes and reduction in number of gondola cars

- Revenue decreased by 39.7% YoY to USD 85.0m due to continued decline in gondola rates in 1H2013 and RUB devaluation. EBITDA decreased by 53.9% YoY to USD 24.5m

Liner and Logistics Division

- Strong growth of export-import sea container transportation in 1H2014 (up by 11.8% YoY)

- In 1H2014, revenue in RUB was up by 4.4% YoY and in USD decreased by 6.9% YoY down to USD 304.8m driven by RUB devaluation and growing share of export in intermodal transportation

- EBITDA in 1H2014 declined by 46.3% YoY due to zero EBITDA in 1Q2014. In 2Q2014, EBITDA was up by 8.0% YoY

Shipping Division

- Shipping Division demonstrated 16.0% YoY growth of revenue and positive EBITDA of USD 2.9m in 1H2014 due to positive result from icebreakers and profitable contracts with the third party

Bunkering

- Bunkering business contributed USD 70.9m to the Group's revenue and USD 6.2m to the Group's EBITDA in 1H2014