2015 Interim Results

 Click on, or paste the following links into your web browser, to view the associated PDF documents.

http://www.rns-pdf.londonstockexchange.com/rns/9208Y_-2015-9-14.pdf

http://www.rns-pdf.londonstockexchange.com/rns/9208Y_1-2015-9-14.pdf 

For immediate release 14 September 2015

Global Ports Investments PLC

2015 Interim Results

Global Ports Investments PLC ("Global Ports" or the "Company", together with its subsidiaries and joint ventures, the "Group" or the "Global Ports Group"; LSE ticker: GLPR) today announces its operational results and publishes its interim condensed consolidated financial information (unaudited) for the six-month period ended 30 June 2015.

Certain financial and operational information which is derived from the management accounts is marked in this announcement with an asterisk {*}. Information (including non-IFRS financial measures) requiring additional explanation or terms which begin with capital letters and the explanations or definitions thereto are provided at the end of this announcement. 

SUMMARY

Global Ports' focus in the first half of 2015 was on improving operational efficiency, maximising free cash flow and deleveraging against the backdrop of a difficult market environment. As a result of these actions, the Group increased its Adjusted EBITDA margin by 530 basis points* to 71.6%* and generated strong Free Cash Flow of USD 129 million*. The Group continued to focus on further deleveraging its balance sheet, decreasing its Net Debt by USD 92 million* and maintaining the Group's Net Debt/LTM Adjusted EBITDA ratio at 3.3x* as of the end of the period.

Group financial and operational highlights for the six months ended 30 June 2015

● Against the backdrop of a macroeconomic slowdown and a sharp devaluation of the Russian rouble, Global Ports' Marine Container Throughput declined 32%*[1] year on year to 834 thousand TEU* in the first six months of 2015;

● Revenue was 25.2% lower than in the first half of 2014 at USD 214.3 million, mainly driven by lower container throughput and a decline in other revenues;

● The Group achieved a record Adjusted EBITDA margin of 71.6%* as continued focus on efficiency and cost control and the devaluation of the Russian rouble enabled the Group to reduce Total Operating Cash Costs by 37%* and to expand the margin by 530 basis points*;

● Adjusted EBITDA in the first six months of 2015 declined 19.2%* to USD 153.4 million*, with growth in the Adjusted EBITDA margin partly offsetting impact of the revenue decline on Adjusted EBITDA;

● Operating profit adjusted for impairment[2] declined 4.1%* year on year to USD 120.9 million in the first half of 2015;

● Net profit adjusted for impairment grew by 8.9%* or USD 5.9 million* to USD 72.1 million* in the first half 2015 compared to USD 66.2 million in the first six months of 2014;

● The Group reduced its capital expenditures on a cash basis in the first six months of 2015 by 63.8% to USD 4.7 million. CAPEX reduction was achieved successfully without compromising service quality, reliability and safety of operations due to available capacity at the Group's well invested terminals;

● The Group generated Free Cash Flow of USD 129 million* during the period, only 11%* below what was achieved in 1H 2014;

● The Group's Net Debt[3] was reduced by USD 92 million during the first six months of 2015, while Net Debt to Adjusted LTM EBITDA remained at a comfortable level of 3.3x* as of 30 June 2015 (compared to 3.2x* as of 31 December 2014).

Tiemen Meester, Chairman of Global Ports, commented:

"The macro-economic backdrop in Russia remained challenging throughout the first half of 2015 affecting consumer demand. Although this had a strong impact on imports, we have been seeing growth in containerized exports since 2013, which is a promising development.

During the six-month period, we have worked hard to mitigate the impact of the tough market conditions on our business. We have continued to focus on efficiency and cost cutting while successfully marketing our premium terminal services to our clients. Through these activities, we have expanded our EBITDA margin to 72% and limited the decline in Free Cash Flow to 11%, ensuring we continue to generate strong cash flow. This has again been principally allocated to servicing debt as deleveraging remains a key priority for the Group.

Looking ahead to the second half of the year, we expect that the market will remain difficult. Nonetheless, Global Ports has excellent assets and a great management team, further complemented by our new CEO's experience and expertise, and is well-placed to successfully navigate the current market conditions."

Further information is available in the following Appendices

● Appendix 1: Results of operations for Global Ports for the first half of 2015;

● Appendix 2: Definitions and Presentation of Information; and

● Appendix 3: Investor Presentation.

Downloads

Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2015 for Global Ports are available for viewing and downloading at www.globalports.com.

Analyst and Investor Conference call

The publication of these results will be accompanied by an analyst and investor conference call hosted by:

· Vladislav Baumgertner, Chief Executive Officer;

· Mikhail Loganov, Chief Financial Officer;

· Evgeny Zaltsman, Head of Business Development;

· Anders Kjeldsen, Chief Operational Officer, Global Ports Management.

Date: Monday, 14 September 2015

Time: 14.00 UK / 09.00 US (East coast) / 16.00 Moscow

To participate in the conference call, please dial one of the following numbers and ask to be put through to the "Global Ports" call:

Standard International Access: +44 (0) 20 3003 2666

UK Toll Free: 0808 109 0700

USA Toll Free: +1 866 966 5335

Russia Toll Free: 8 10 8002 4902044

ENQUIRIES

Global Ports Investor Relations

Mikhail Grigoriev

+357 25 313 475

Email: [email protected]

Global Ports Media Relations

Anna Vostrukhova

+357 25 313 475

E-mail: [email protected]

StockWell Communications

Laura Gilbert/ Zoe Watt

+44 20 7240 2486

E-mail: [email protected].

NOTES TO EDITORS

Global Ports

Global Ports Investments PLC is the leading operator of container terminals in the Russian market.

Global Ports' terminals are located in the Baltic and Far East Basins, key regions for foreign trade cargo flows. Global Ports operates five container terminals in Russia (Petrolesport, First Container Terminal, Ust-Luga Container Terminal[4] and Moby Dik[5] in the Russian Baltics, and Vostochnaya Stevedoring Company in the Russian Far East) and two container terminals in Finland[6] (Multi-Link Terminals Helsinki and Multi-Link Terminals Kotka). Global Ports also owns inland container terminals Yanino Logistics Park[7] and Logistika-Terminal, both located in the vicinity of St. Petersburg, and has a 50% stake in the major oil products terminal AS Vopak E.O.S. in Estonia[8].

Global Ports' consolidated revenue in the first half 2015 was USD 214.3 million and Adjusted EBITDA was USD 153.4 million*. The total marine container throughput was 834 thousand TEU* in the first half 2015.

Global Ports' major shareholders are Transportation Investments Holding Limited (operating under the brand name of N-Trans), one of the largest private transportation and infrastructure groups in Russia (30.75%), and APM Terminals B.V. (30.75%), whose core expertise is the design, construction, management and operation of ports, terminals and inland services. APM Terminals operates a global terminal network of 62 ports and 135 inland services facilities, giving the company a global presence in 58 countries. 20.5% of Global Ports shares are traded in the form of global depositary receipts listed on the Main Market of the London Stock Exchange (LSE ticker: GLPR).

For more information please see: www.globalports.com

LEGAL DISCLAIMER

Some of the information in these materials may contain projections or other forward-looking statements regarding future events or the future financial performance of Global Ports. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" or the negative of such terms or other similar expressions. Global Ports wishes to caution you that these statements are only predictions and that actual events or results may differ materially. Global Ports does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of Global Ports, including, among others, general political and economic conditions, the competitive environment, risks associated with operating in Russia and market change in the industries Global Ports operates in, as well as many other risks related to Global Ports and its operations.

Appendix 1: Results of operations for Global Ports in the first half 2015

The financial information presented in this appendix is extracted from the Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2015, prepared in accordance with International Financial Reporting Standards adopted by the European Union ("IFRS") applicable to interim financial reporting (International Accounting Standard 34 "Interim Financial Reporting"). This appendix also includes certain non-IFRS financial information, identified using capitalised terms below. For further information on the calculation of such non-IFRS financial information, see Appendix 2 (Definitions and Presentation of Information) and the section entitled "Non-IFRS Measures: Adjusted EBITDA and Adjusted EBITDA Margin" below. Readers of this appendix should read the entire announcement together with the Global Ports Group Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2015 also released on the date hereof, and not just rely on the summary information set out below.

Certain financial and operational information which is derived from the management accounts is marked in this announcement with an asterisk {*}.

Results of operations of Global Ports for the six-month period ended 30 June 2014 and 2015

The following table sets out the principal components of the Global Ports consolidated income statement for the first half of 2015.

Revenue

Revenue decreased by USD 72.2 million, or 25.2% year on year, from USD 286.5 million in the first half of 2014 to USD 214.3 million in the first half of 2015. This was driven by changes in revenue from the Russian Ports segment which is discussed in greater detail below in the segmental financial results.

Cost of sales

Cost of sales decreased by USD 7.2 million, or 5.8%, from USD 123.4 million in the first six months of 2014 to USD 116.3 million in the corresponding period in 2015.

Cash Cost of Sales decreased by 43.5%* or USD 30.8 million* to USD 39.9 million* for the first half 2015 compared to 70.7 million* in the first half 2014. This decrease was driven by the Russian Ports segment. Cash Cost of Sales of the Russian Ports segment is discussed in greater detail below in the discussion of the financial results for each of Global Ports Group's segments.

Impairment charge adjustment

Cost of sales includes an impairment charge for property, plant and equipment in the first half 2015 of USD 46.7 million ("Impairment") caused by a change in estimates of the business of Ust-Luga Container Terminal (ULCT), a marine terminal of the Group.

Administrative, selling and marketing expenses

Administrative, selling and marketing expenses decreased by USD 5.2 million or 19.4% from USD 26.5 million in the first half of 2014 to USD 21.4 million in the first half of 2015.

Share of profit/(loss) of joint ventures accounted for using the equity method

The following table sets out the principal components of the Global Ports share of profit/(loss) of joint ventures accounted for using the equity method for the first half of 2015 compared to the first half 2014.

Share of profit/(loss) of joint ventures accounted for using the equity method amounted to USD 4.5 million in the first half of 2015 compared to a loss of USD 9.1 million in the first half of 2014. The change was primarily driven by smaller adverse effect of CD Holding financial performance from USD 17.4 million in the first half of 2014 to USD 3.5 million in the first half of 2015. This change was mainly related to Yanino Logistics Park.

Other gains/(losses) -net

Other gains/(losses) - net in the first half of 2015 was a loss of USD 7.0 million compared to a loss of USD 1.5 million in the first half of 2014. This change was largely due to changes in FX gains/(losses) from accounts payable and receivable as well as effect of currency component of derivative financial instruments.

Operating profit

Operating profit decreased by USD 51.8 million, or 41.1% year on year, from USD 126.0 million in the first half of 2014 to USD 74.2 million in the first half of 2015. The decline was primarily attributable to the Impairment described above.

Operating profit adjusted for impairment declined by 4.1%* or USD 5.1 million* from USD 126.0 million* in the first half of 2014 to USD 120.9 million* in the first half of 2015.

Finance costs-net

The following table sets out the principal components of Global Ports' Finance income/(costs) - net for the first half of 2015 compared to the first half of 2014:

Finance costs-net were USD 29.0 million in the reporting period comprised Net foreign exchange gains/(losses) on financing activities of USD 6.1 million and Interest expenses on bank borrowings of USD 36.1 million. Net foreign exchange gains on financing activities derives mostly from the USD denominated borrowings in the Group's subsidiaries, whose functional currency, the Russian Rouble, was subject to appreciation in the first half of 2015[9].

Profit before income tax

Profit before income tax was USD 45.2 million in the first half of 2015 which is USD 50.8 million or 52.9% lower compared to the Profit before tax in the first half of 2014. The decline was primarily driven by the Impairment described above.

Income tax expense

Income tax expense in the reporting period was USD 19.8 million compared to USD 29.8 million in the corresponding period of 2014

Profit for the period

Profit for the period declined by USD 40.8 million or 61.6% from USD 66.2 million in the first half of 2014 to USD 25.4 million in the first half of 2015, primarily due to the Impairment described above.

Net Profit adjusted for Impairment increased by 8.9%* or USD 5.9 million* from USD 66.2 million* in the first half of 2014 to USD 72.1 million*. The growth was driven by factors discussed above.

Basic and diluted earnings per share for profit attributable to the Equity Owners of the Company

Basic and diluted earnings per share for profit attributable to the Equity Owners of the Company during the reporting period declined by USD 0.06 or 50.3% to USD 0.06 compared to USD 0.12 for the corresponding period of 2014, primarily due to the reasons described above.

Non-IFRS Measures: Adjusted EBITDA and Adjusted EBITDA Margin

The following table sets out the adjustments made to Global Ports' revenue for the six months to calculate Global Ports' Adjusted EBITDA[10] for the first half of 2015 and 2014.

Adjusted EBITDA in the first half of 2015 decreased by USD 36.5 million*, or 19.2%*, from USD 189.9 million* in the first half of 2014 to USD 153.4 million*, mainly as a result of a decrease in Revenue which was partially offset by the decrease in Cash Cost of sales and Administrative, selling and marketing expenses (excluding depreciation of PPE, amortisation of intangible assets and impairment of PPE).

The Group's Adjusted EBITDA Margin increased to a record 71.6%* in the first half of 2015 compared to 66.3%* in the first half of 2014 due to the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

As at 30 June 2015, Global Ports had USD 117.4 million in cash and cash equivalents.

Global Ports' liquidity needs arise primarily in connection with the capital investment programmes of each of its operating segments as well as their operating costs. In the period under review, Global Ports Group's liquidity needs were met by revenues generated from operating activities.

As a result of the shareholding or joint venture agreements in relation to Moby Dik, the Finnish Ports, Yanino and Vopak E.O.S., cash generated from the operating activities of the entities constituting these businesses is not freely available to fund other operations or capital expenditures of Global Ports Group or any other businesses within Global Ports Group, and can only be lent to another entity or distributed as a dividend with the consent of the other shareholders who are parties to those arrangements. PLP, FCT, ULCT and VSC are not subject to such agreements. Accordingly, each of Global Ports Group's businesses is largely dependent on the cash generated by it and its own borrowings, whether external or from other fully controlled entities of the Group, to fund its cash and capital requirements.

As at 30 June 2015, the Global Ports Group had USD 1,233.0 million of Total debt, of which USD 1,014.8 million was non-current borrowings, USD 103.5 million was value of derivative financial instruments and USD 114.7 million was current borrowings. See also "Capital resources".

Capital expenditures

Global Ports Group's capital expenditure on a cash basis in the first half of 2015 was USD 4.7 million compared to USD 13.0 million in the same period in 2014, and was mostly used to finance the maintenance of its terminals' capacity.

Cash flows for the first half 2014 and 2015

The following table sets out the principal components of Global Ports' consolidated cash flow statement for the first half of 2014 and 2015.

Net cash from operating activities

Net cash from operating activities decreased by USD 23.7 million, or 15.1%, from USD 157.7 million in the first half of 2014 to USD 134.0 million in the first half of 2015. This decrease was primarily due to a fall in Cash generated from operations which decreased by USD 20.0 million or 11.5%, and an increase in tax paid, from USD 24.0 million in the first half of 2014 to USD 27.0 million in the first half of 2015.

The Group received USD 7.5 million as dividends from its joint ventures (MLT) in the first half 2015 (USD 8.3 million in the first half 2014).

Net cash used in investing activities

Net cash used in investing activities decreased by USD 68.7 million, or 95.0% year on year, from USD 72.3 million in the first half of 2014 to USD 3.6 million in the first half of 2015. This change was primarily due to the USD 55.7 million of Contingent consideration paid in the first half of 2014 as the cash component of the consideration paid on the acquisition of the NCC Group, as well as a 63.8% (USD 8.3 million) decrease in Cash CAPEX (Purchases of property, plant and equipment).

Net cash used in financing activities

Net cash used in financing activities in the first half of 2015 was USD 91.3 million. This consisted primarily of net Repayment of borrowings and financial leases (USD 55.3 million) and interest paid (USD 35.9 million).

Net cash used in financing activities in the first half of 2014 was USD 79.0 million. This consisted primarily of Dividends paid to the owners of the Company (USD 25.6 million), interest paid (USD 55.6 million) and Net cash outflows from borrowings of USD 10.1 million*.

Free Cash Flow

The Group generated USD 129.2 million* of Free Cash Flow in the first half of 2015 compared to USD 144.7 million* in the first half of 2014. The decline in Free Cash Flow was USD 15.5 million* or 10.7%*, which is substantially below the decline in revenue over this period. The relatively small decline was largely due to the measures that were implemented aimed at cost cutting and efficiency improvements combined with the devaluation of the Russian rouble and the decline in CAPEX each described further above.

Capital resources

The Global Ports Group's financial indebtedness consists of bank borrowings, loans from third parties and finance lease liabilities in an aggregate principal amount of USD 1,129.5 million as at 30 June 2015, compared to USD 1,183.6 million as at 31 December 2014. In addition the Group held a Derivative financial instrument with a value of USD 103.5 million and USD 102.8 million as of 30 June 2015 and 31 December 2014, respectively. The decrease in financial indebtedness from the end of 2014 was mainly driven by the repayment of borrowings for a total amount of USD 55.3 million.

The Group's weighted average effective interest rate as at 30 June 2015 was 6.0%*.

As at 30 June 2015, the carrying amounts of Global Ports' borrowings were effectively 99%* denominated in USD dollars[11]:

The following table sets forth the maturity profile of the Group's borrowings (including finance leases and derivative financial instruments) as at 30 June 2015.

Results of operations for the Global Ports Group's segments for the first half of 2015 and 2014

The following table sets forth the Global Ports Group's key operational information for the first half of 2015 and 2014[12]. The information in this table is derived from management accounts.

Results of operations for the Russian Ports segment

The Russian Ports segment consists of the Global Ports Group's interests in PLP (100%), VSC (100%), FCT (100%), ULCT (80%) (in which Eurogate currently has a 20% effective ownership interest), Moby Dik (75%), Yanino (75%) (Container Finance currently has a 25% effective ownership interest in each of Moby Dik and Yanino), and Logistika Terminal (100%).

The results of Moby Dik and Yanino are accounted in the Global Ports' consolidated financial statements for the first half of 2015 and the first half 2014 using an equity method of accounting, but are included in the figures and discussion below on a 100% basis consistent with segmental reporting.

Operational performance

Primarily as a result of changes in the macroeconomic environment, the throughput container terminals in Russia declined 26%*[13] in the first half of 2015 compared to the first half 2014. However the throughput of laden export containers at Russian container terminals increased 1.2%*13 in the first half 2015 compared to the same period of 2014. This growth in laden export was driven by the ongoing containerisation in Russia underpinned by the depreciation of the Russian rouble against the US dollar.

The decline of throughput in the Russian Baltic Basin, where four of the Group's five marine container terminals in Russia are located, was 32%*13 year on year. The throughput in the Russian Far Eastern Basin, where the other one of the Group's marine terminals is located, declined 23%*13.

Gross marine container throughput in the Russian Ports segment of the Group declined 32%* to 834 thousand TEU* in the first half 2015 compared to 1,233 thousand TEU* in the first half 2014. The decline in throughput was largely driven by the decline of overall market volumes as well as the commercial strategy of the Group.

Car handling volumes decreased 9%* in the first half of 2015 compared to the same period in 2014 to 56 thousand* cars. Traditional Ro-Ro handling declined by 48%* to 6 thousand* units in the reporting period compared to 12.3 thousand units* in the first half of 2014.

In order to fully utilise the available space at its terminals the Group also focussed on increasing bulk cargo volumes in its terminals. As a result, the handling of bulk cargo at marine terminals increased in the first half of 2015 by 27.5%* or 113 thousand tonnes* to 525 thousand tonnes* compared to 412 thousand tonnes* in the first half of 2014.

Container and bulk cargo throughput at the Group's inland terminals increased 8.2%* and 6.3%* respectively year on year to 90 thousand TEU* and 305 thousand tonnes*, due to the ongoing containerisation in Russia during this period and the growth in exports from Russia mentioned above.

Financial Performance

Revenue

The Russian Ports segment primarily generates revenue from container handling, which accounted for 84.5%* of the segment's revenue in the first half of 2015 and 83.7%* in the first half of 2014. The Russian Ports segment also generates revenue from handing bulk cargo, cars, traditional Ro-Ro and ancillary services. Revenue from these activities accounted for 15.5%* and 16.3%* of the segment's revenue in the first half of 2015 and 2014, respectively.

The segment's revenue decreased by USD 74.9 million, or 24.4%, from USD 306.6 million in the first half 2014 to USD 231.7 million in the first half of 2015. This decrease was due to a USD 60.7 million* or 23.7%* decrease in revenue attributable to container handling, and a USD 14.2 million* or 28.4%* decline in other revenue.

The decrease in revenue from container handling was primarily due to the lower container throughput in the Russian Ports segment which was partially offset by an increase in revenue per TEU in the first half of 2015 compared to the first half of 2014.

Positive changes to its service mix, and a successful commercial campaign supported by both the range of its terminal network as well as its quality of service enabled the Group to achieve a USD 19* or 8.5%* Revenue per TEU increase[14] in the first half of 2015 compared to the second half of 2014.

Other revenue in the first half of 2015 compared to the first half of 2014 decreased, primarily due to lower throughput in the majority of other cargo types.

The following table sets forth the components of the Russian Ports segment's revenue for the first half of 2015 compared to 2014.

Cost of sales, administrative, selling and marketing expenses

The following table sets out a breakdown, by expense, of the cost of sales, administrative, selling and marketing expenses for the Russian Ports segment for the first half of 2015 compared to the first half of 2014.

The Russian Ports segment's cost of sales, administrative, selling and marketing expenses declined by 23.6% or USD 41 million from USD 174.2 million in the first half of 2014 to USD 133.1 million in the first half of 2015.

The segment's Operating Cash Costs decreased by USD 43.6* million, or 44.6%*.

The decline in the Russian Ports segment's Operating Cash Costs was driven by a 43% decrease in Staff costs of USD 20.3 million, a 50.6% reduction in Fuel, electricity and gas expenses of USD 4.3 million, a 37.9% decrease in Repair and maintenance of property, plant and equipment of USD 2.4 million, a 45.8% decrease in Transportation costs of USD 3.2 million as well as a 46.6% decrease in Other operating expenses of USD 13.3 million. These decreases were driven by a combination of positive FX effects, the overall decline in throughput, efficiency improvements and strong cost control.

Adjusted EBITDA (Non-IFRS financial measure)

The Russian Ports segment's Adjusted EBITDA decreased 15%* in the reporting period by USD 31.3 million* year on year to USD 177.4 million*.

The Adjusted EBITDA Margin of the Russian Ports segment increased by 850 basis points* year on year, from 68.1%* in the first half of 2014 to 76.6%* in the first half of 2015, due to the reasons discussed above.

Results of operations for the Oil Products Terminal segment

The Oil Products Terminal segment consists of the Global Ports Group's ownership interest in Vopak E.O.S (in which Royal Vopak currently has a 50% effective ownership interest).

The results of the Oil Products Terminal segment are accounted for in the Global Ports' consolidated financial statements for the first half of 2015 and the first half of 2014 using an equity method of accounting, but are included in the figures and discussion below on a 100% basis.

The following table sets out the results of operations for the Oil Products Terminal segment for the first half of both 2014 and 2015.

Revenue

The Oil Products Terminal segment's revenue decreased by USD 16.7 million, or 24.7%, from USD 67.7 million in the first half 2014 to USD 51 million in the first half 2015. This decrease was primarily due to (i) a decrease in throughput at the terminal due to the difficult market environment as cargo owners preferred to handle more product within Russia and (ii) depreciation of Euro against US dollar[15] which resulted in decrease of Euro-nominated revenue in US dollars.

Cost of sales, administrative, selling and marketing expenses

The following table sets out a breakdown, by expense, of the cost of sales, administrative, selling and marketing expenses for the Oil Products Terminal segment for the first half of 2014 and 2015.

The Oil Products Terminal segment's Total cost of sales, administrative, selling and marketing expenses decreased by USD 12.8 million, or 23.3%, from USD 54.9 million in the first half of 2014 to USD 42.1 million in the first half of 2015. The decrease was impacted by change in average exchange rate of Euro against USD dollar as well as driven by change of respective cost items. Transportation expenses decreased by USD 4.8 million or 31.6%, Fuel, electricity and gas expenses decreased by USD 1.5 million driven largely by drop in rail-delivered cargo volumes. Staff costs decreased by USD 2.3 million or 21.6%, as a result of cost-cutting measures taken in the course of the change to business model.

Operating Cash Costs of the Oil Products Terminal segment declined by USD 10.3 million* or 24.9%* from USD 41.4 million* in the first half of 2014 to USD 31.1 million* in the first half of 2015, primarily as a result of the factors described above.

Adjusted EBITDA (Non-IFRS financial measure)

The Oil Products Terminal segment's Adjusted EBITDA decreased by USD 6.4 million* or 24.3%* from USD 26.2 million* in the first half 2014 to USD 19.9 million* in the first half of 2015 due to the factors described above.

The Adjusted EBITDA Margin of the Oil Products Terminal segment increased from 38.8%* in the first half of 2014 to 38.9%* in the first half of 2015 due to the factors described above.

Results of operations for the Finnish Ports segment

The Finnish Ports segment consists of the Global Ports Group's ownership interests in MLT Kotka and MLT Helsinki (in each of which Container Finance currently has a 25% effective ownership interest).

The results of the Finnish Ports segment are accounted for in the Global Ports' consolidated financial statements for the first half of 2015 and the first half of 2014 using an equity method of accounting, but are included in the figures and discussion below on a 100% basis.

Operational performance

The Gross Container Throughput of the Finnish Ports segment increased by 5%* year on year to 128 thousand* TEU from 122 thousand* TEU in the first half 2014, primarily driven by a change in the client mix at the Segment's terminals.

Financial Performance

Revenue

The Finnish Ports segment's revenue decreased by USD 2.9 million, or 23.1%, from USD 12.7 million in the first half of 2014 to USD 9.7 million in the first half of 2015. The decrease was primarily due to the change in the client mix at the Segment's terminals and a reduction of storage revenues related to declining Russian transit cargo.

Cost of sales, administrative, selling and marketing expenses

The following table sets out a breakdown, by expense, of the cost of sales, administrative, selling and marketing expenses for the Finnish Ports segment for the first half of 2014 and 2015.

The Finnish Ports segment's cost of sales, administrative, selling and marketing expenses decreased by USD 3.0 million, or 24.6%, from USD 12.0 million in the first half of 2014 to USD 9.1 million the first half of 2015.

Adjusted EBITDA (Non-IFRS financial measure)

The Finnish Ports segment's Adjusted EBITDA decreased by USD 0.4 million* or 16.6%* from USD 2.1 million* in the first half of 2014 to USD 1.8 million* in the first half of 2015 due to the factors described above.

The Adjusted EBITDA Margin of the Finnish Ports segment increased from 16.7%* in the first half of 2014 to 18.1%* in the first half of 2015 due to the factors described above.

Estimated impairment of property, plant and equipment

The Group follows its accounting policies to test goodwill and other non-financial assets for possible impairment or reversal of impairment. In the course of the preparation of the interim condensed financial information for the six-month period ended 30 June 2015, forecasts used for estimating discounted future cash flows for impairment testing purposes have been updated.

Based on the results of the impairment tests carried out, for all units except ULCT, the Board of Directors believes that there is no requirement for further impairments or indications for reversal of impairments recognised in previous periods for non-financial assets other than goodwill. For ULCT CGU an impairment charge of USD 46.7 million was recognised, as described further above (see - page 6 Impairment Charge Adjustment). The impairment charge was fully allocated to property, plant and equipment.

Appendix 2: Definitions and Presentation of Information

DEFINITIONS

Terms that require definitions are marked with capital letters in this announcement and the definitions of which are provided below in alphabetical order.

Adjusted EBITDA (a non-IFRS financial measure) for Global Ports Group is defined as profit for the period before income tax expense, finance income/(costs)-net, share of profit/(losses) of joint ventures accounted for using equity method, depreciation of property, plant and equipment, amortisation of intangible assets, other gains/(losses)-net, impairment charge of property, plant and equipment, and impairment charge of goodwill.

Adjusted EBITDA Margin (a non-IFRS financial measure) is calculated as Adjusted EBITDA divided by revenue, expressed as a percentage.

Average Storage Capacity is a storage capacity available at Vopak E.O.S. oil products terminals, averaged for the beginning and end of the year.

Baltic Sea Basin is the geographic region of northwest Russia, Estonia and Finland surrounding the Gulf of Finland on the eastern Baltic Sea, including St. Petersburg, Ust-Luga, Tallinn, Helsinki and Kotka.

Container Throughput in the Russian Federation Ports is defined as total container throughput of the ports located in the Russian Federation, excluding half of cabotage cargo volumes. Respective information is sourced from ASOP ("Association of Sea Commercial Ports", www.morport.com).

Cash Costs of Sales (a non-IFRS financial measure) are defined as cost of sales, adjusted for depreciation and impairment of property, plant and equipment, amortisation and impairment of intangible assets.

Cash Administrative, Selling and Marketing expenses (a non-IFRS financial measure) are defined as administrative, selling and marketing expenses, adjusted for depreciation and impairment of property, plant and equipment, amortisation and impairment of intangible assets.

CD Holding group consists of Yanino Logistics Park (an inland terminal in the vicinity of St. Petersburg), CD Holding and some other entities. The results of CD Holding group are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below Adjusted EBITDA).

Far East Basin is the geographic region of southeast Russia, surrounding the Peter the Great Gulf, including Vladivostok and the Nakhodka Gulf, including Nakhodka on the Sea of Japan.

First Container Terminal (FCT) is located in the St. Petersburg harbour, Russia's primary gateway for container cargo and is one of the first specialised container terminals to be established in the USSR. The Global Ports Group owns a 100% effective ownership interest in FCT. The results of FCT are fully consolidated.

Finnish Ports segment consists of two terminals in Finland, MLT Kotka and MLT Helsinki (in the port of Vuosaari), in each of which Container Finance currently has a 25% effective ownership interest. The results of the Finnish Ports segment are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Free Cash Flow is calculated as Net cash from operating activities less Purchase of PPE

Functional Currency is defined as the currency of the primary economic environment in which the entity operates. The functional currency of the Company and certain other entities in the Global Ports Group is US dollars. The functional currency of the Global Ports Group's operating companies for the years under review was (a) for the Russian Ports segment, the Russian rouble, (b) for Oil Products Terminal segment, and for the Finnish Ports segment, the Euro.

Gross Container Throughput represents total container throughput of a Group's terminal or a Group's operating segment shown on a 100% basis. For the Russian Ports segment it excludes the container throughput of the Group's inland container terminals - Yanino and Logistika Terminal.

Logistika Terminal (LT) is an inland container terminal providing a comprehensive range of container freight station and dry port services at one location. The terminal is located to the side of the St. Petersburg - Moscow road, approximately 17 kilometres from FCT and operates in the Shushary industrial cluster. The Global Ports Group owns a 100% effective ownership interest in LT. The results of LT are fully consolidated.

LTM Adjusted EBITDA is calculated as Adjusted EBITDA for the 1H 2015 and 2H2014

MLT Group consists of Moby Dik (a terminal in the vicinity of St. Petersburg) and Multi-Link Terminals Oy (terminal operator in Vuosaari (near Helsinki, Finland) and Kotka, Finland). The results of MLT group are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Moby Dik (MD) is located on the St. Petersburg ring road, approximately 30 kilometers from St. Petersburg, at the entry point of the St. Petersburg channel. It is the only container terminal in Kronstadt. The Global Ports Group owns a 75% effective ownership interest in MD, Container Finance LTD currently has a 25% effective ownership interest. The results of MD are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Net Debt (a non-IFRS financial measure) is defined as a sum of current borrowings and non-current borrowings, derivative financial instruments less cash and cash equivalents and bank deposits with maturity over 90 days.

Oil Products Terminal segment consists of the Group's 50% ownership interest in Vopak E.O.S. (in which Royal Vopak currently has a 50% effective ownership interest). The results of the Oil Products Terminal segment are consolidated in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Operating Cash Costs of Russian Ports (a non-IFRS measure) are defined as total Russian Ports segment's cost of sales and administrative, selling and marketing expenses, less segment's depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Operating Cash Costs of Oil Products Terminal segment (a non-IFRS measure) are defined as total Oil Products Terminalsegment's cost of sales and administrative, selling and marketing expenses, less segment's depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Operating Cash Costs of Finnish Ports (a non-IFRS measure) are defined as total Finnish Ports segment's cost of sales and administrative, selling and marketing expenses, less the segment's depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Petrolesport (PLP) is located in the St. Petersburg harbour, Russia's primary gateway for container cargo. The Group owns a 100% effective ownership interest in PLP. The results of PLP are fully consolidated.

Ro-Ro, roll on-roll off is cargo that can be driven into the belly of a ship rather than lifted aboard. Includes cars, buses, trucks and other vehicles.

Russian Ports segment consists of the Global Ports Group's interests in PLP (100%), VSC (100%), FCT (100%), ULCT (80%) (in which Eurogate currently has a 20% effective ownership interest), Moby Dik (75%), Yanino (75%) (in each of Moby Dik and Yanino Container Finance currently has a 25% effective ownership interest), and Logistika Terminal (100%). The results of Moby Dik and Yanino are accounted in the Global Ports' consolidated financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

TEU is defined as twenty-foot equivalent unit, which is the standard container used worldwide as the uniform measure of container capacity; a TEU is 20 feet (6.06 metres) long and eight feet (2.44 metres) wide and tall.

Total Operating Cash Costs (a non-IFRS financial measure) is defined as Global Ports Group's cost of sales, administrative, selling and marketing expenses, less depreciation and impairment of property, plant and equipment, less amortisation and impairment of intangible assets.

Ust Luga Container Terminal (ULCT) is located in the large multi-purpose Ust-Luga port cluster on the Baltic Sea, approximately 100 kilometres westwards from St. Petersburg city ring road. ULCT began operations in December 2011. The Global Ports Group owns an 80% effective ownership interest in ULCT, Eurogate, the international container terminal operator, currently has a 20% effective ownership interest. The results of ULCT are fully consolidated.

Vopak E.O.S. includes AS V.E.O.S. and various other entities (including an intermediate holding) that own and manage an oil products terminal in Muuga port near Tallinn, Estonia. The Group owns a 50% effective ownership interest in Vopak E.O.S.. The remaining 50% ownership interest is held by Royal Vopak. The results of Vopak E.O.S. are accunted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Vostochnaya Stevedoring Company (VSC) is located in the deep-water port of Vostochny near Nakhodka on the Russian Pacific coast, approximately eight kilometers from the Nakhodka-Vostochnaya railway station, which is connected to the Trans-Siberian Railway. The Group owns a 100% effective ownership interest in VSC. The results of VSC are fully consolidated.

Weighted average effective interest rate is the average of interest rates weighted by the share of each loan in the total debt portfolio.

Yanino Logistics Park (YLP) is the first terminal in the Group's inland terminal business and is one of only a few multi-purpose container logistics complexes in Russia providing a comprehensive range of container and logistics services at one location. It is located approximately 70 kilometres from the Moby Dik terminal in Kronstadt and approximately 50 kilometres from PLP. The Global Ports Group owns a 75% effective ownership interest in YLP, Container Finance LTD currently has a 25% effective ownership interest. The results of YLP are accounted in the Global Ports' financial information using equity method of accounting (proportionate share of net profit shown below EBITDA).

Appendix 3: Investor Presentation

An investor presentation is available at www.globalports.com.

PRESENTATION OF INFORMATION

Unless stated otherwise, financial information presented in this announcement is derived from the Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2015 prepared in accordance with International Reporting Standards ("IFRS"), as adopted by the European Union and the requirements of Cyprus Companies Law, Cap. 113. The Global Ports Group's Interim condensed consolidated financial information (unaudited) for the six month period ended 30 June 2015 is available at the Global Ports Group's corporate website (www.globalports.com).

The financial information is presented in US dollars, which is also the functional currency of the Company and certain other entities in the Global Ports Group. The functional currency of the Global Ports Group's operating companies for the periods under review was (a) for the Russian Ports segment, the Russian rouble, (b) for Oil Products Terminal segment and for the Finnish Ports segment, the euro.

Certain financial information which is derived from management accounts is marked in this announcement with an asterisk {*}.

In this announcement, the Global Ports Group has used certain non-IFRS financial information as supplemental measures of the Global Ports Group's operating performance.

Information (including non-IFRS financial measures) requiring additional explanation or defining is marked with initial capital letters and the explanations or definitions are provided at the end of this announcement.

Rounding adjustments have been made in calculating some of the financial and operational information included in this announcement. As the result, numerical figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that precede them.

Market share data has been calculated using the information published by the Association of Sea Commercial Ports ("ASOP"), www.morport.com.

------------------------------------------------END-------------------------------------------------