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01.12.2015 Managements discussion and analysis of NCSP Groups Consolidated Financial Results to IFRS for 9 months 2015

NCSP Group (LSE: NCSP, MoEx: NMTP) hereby releases a summary of managements discussion and analysis of Groups consolidated financial results to IFRS for the 9 months 2015, as presented at the conference call for investors and analysts held on December 1, 2015 at 17:00 Moscow time.


NCSP Groups consolidated revenue for 9M 2015 amounted to $655 mln versus $747 mln for 9M 2014 despite sustainable volumes growth and material improvement in crude oil volumes.

Groups costs (COS plus SG&A) did not change materially in rubles, but reduced 41% year-on-year in dollar term due to ruble depreciation.

Groups EBITDA in the reporting period grew by $37.6 mln* or 8.3% year-on-year and reached $488.4 mln*, while EBITDA margin increased by 14.2 percent points and reached 75%*.

Net income for 9M 2015 totaled $156.6 mln versus $10.1 mln same time last year.

Thus NCSP Group maintains fundamentally strong financial performance, including growing EBITDA and margins, as well as low leverage.


Revenue

Key drivers of revenue reduction were: the decrease in volumes of crude oil, grain, and containers, FX losses from ruble nominated revenue, and the drop in bunkering volumes.

Stevedoring revenue accounted for most of the decrease and reduced by $83 mln or 14% year-on-year.

Revenue from additional port services, fleet services, and other revenue reduced by $9 mln combined.

Due to changes in cargo mix and volumes Groups stevedoring revenue reduced by $3.7 mln.

Due to changes in tariffs and ruble depreciation stevedoring revenue decreased by $23.3* million.

Bunkering revenues, which are part of stevedoring revenue, reduced by $56.3* mln on the back of decreasing fuel prices, and volumes drop down to 190* thousand tonnes for 9M 2015 from 229* thousand tonnes for 9M 2014.

Groups revenue broken down by cargo types changed as follows.

Groups revenue from crude oil handling reduced by $10.5* mln or 7.0%* year-on-year due to ruble depreciation and volumes drop by 800 thousand tonnes or 1.4% year-on-year.

Groups revenue from oil products handling reduced by $11.8* mln or 9.7%* year-on-year due to ruble depreciation despite volumes growing by 2.3. mln tonnes or 11% year-on-year.

Grain handling revenue is down $15.2 mln or 22.6% year-on-year as volumes dropped 11% year-on-year.

Groups revenue from transshipment of ferrous metals and pig iron increased by $14.8* mln or 24%* in line with volumes growth.

Groups revenue from container cargo reduced by $8.1* mln or 16%* year-on-year, due to volumes decrease by 139* thousand TEU or 28%* year-on-year.

Revenue from other cargo grew $3.8* mln combined.


EBITDA

Groups EBITDA for 9M 2015 grew by $37.6 mln* or 8.3% year-on-year and reached $488.4 mln*, while EBITDA margin increased by 14.2 percent points and reached 75%*.

Changes in revenue from certain cargoes contributed $31.1* mln to EBITDA increase.

Decrease of bunkering volumes reduced EBITDA by $6.8* million.

Due to decrease in revenue from additional port services, fleet services, and other revenue EBITDA was reduced by $5.3* million.

Foreign exchange gain brought EBITDA up by $18.6* million.


Profit for the period

Russian ruble depreciated against US dollar by 10.7 rubles in Q3 2015, which produced a material effect on Groups net income for 9M 2015.

This depreciation led to charging a foreign exchange loss in the amount of $262 mln on the Groups dollar nominated debt, versus foreign exchange gain accounted for in 6M 2015.

Hence, NCSP Groups net income comprised $156.5 mln for 9M 2015 versus $250.3 mln for 6M 2015.


NCSP Groups key operating and financial indicators


(thousand US dollars)

9M 2015

9M 2014

Change

Change %

Revenue

654 676

746 919

- 92 243

-12.3%

EBITDA*

488 353

450 787

37 566

8.3%

EBITDA Margin (%)*

74.6%

60.4%

14.2 pp

-

Profit for the period

156 502

10 087

30-09-2015

31-12-2014

Change

Change %

Debt (including financial lease obligations)

1 588 059

1 741 365

- 153 306

-8.8%

Cash and cash equivalents

317 405

310 723

6 682

2.2%

Net Debt*

1 270 654

1 430 642

- 159 988

-11.2%

Net Debt/LTM EBITDA*

2.09

2.51

9M 2015

9M 2014

Change

Change %

Cargo turnover, thousand tonnes

103 969.0

101 017.5

2 951.5

2.9%


* Management accounts


NCSP Groups consolidated financial information according to IFRS for 9M 2015 can be downloaded from the Groups website at:http://nmtp.info/en/holding/investors/reporting/msfo/


About NCSP Group

NCSP Group is the largest port operator in Russia and the third-largest in Europe, in terms of cargo turnover. NCSP shares are traded on Russia's Moscow Exchange (ticker: NMTP) and on the London Stock Exchange in the form of GDRs (ticker: NCSP). NCSP Group cargo turnover in 2014 totalled 131 million tonnes. Consolidated revenue to IFRS in 2014 totalled USD 956 million and EBITDA was USD 569 million. NCSP Group consolidates the following companies: PJSC Novorossiysk Commercial Sea Port, LLC Primorsk Trade Port, PJSC Novorossiysk Grain Terminal, OJSC Novorossiysk Ship Repair Yard, OJSC NCSP Fleet, OJSC NLE, OJSC IPP, CJSC Baltic Stevedore Company, and CJSC SFP.


Contacts

Kristina Senko, Public Relations; KSenko@ncsp.com

Mikhail Shchur, Investor Relations; MShchur@ncsp.com

 

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