NCSP Group Financial Results for 1H 2013

PRESS RELEASE

NCSP Group Financial Results for 1H 2013

29 August 2013

Novorossiysk Commercial Sea Port Group ("NCSP Group" or the "Group") (LSE: NCSP, Moscow Exchange: NMTP) today reports its interim condensed consolidated IFRS financial results for six months ended 30 June 2013.

1H 2013 financial results

* Management accounts.

NCSP Group's condensed consolidated IFRS financial statements for the six months ended 30 June 2013 are available here: http://nmtp.info/en/holding/investors/reporting/msfo/ 

1H 2013 operational highlights

Total cargo turnover for January-June 2013 was 72.1 million tonnes, compared to 81.6 million tonnes for the first six months of 2012.

Crude oil and grain volumes for 1H 2013 both declined significantly year-on-year, down 9.3 million tonnes and 3.7 million tonnes, respectively. This was primarily due to the re-allocation of crude oil among various export routes on the backdrop of an overall decline in Russian Federation oil exports, as well as the nearly complete absence of grain exports in the first half of 2013 due to the poor harvest in 2012 and high domestic grain prices.

The Group partially compensated these declining volumes with oil products, which increased in 1H 2013 by 3.7 million tonnes, or 40.5%, year-on-year, primarily due to higher volumes at PTP and at the Novorossiysk Fuel Oil Terminal, which was launched as a JV with an oil trading company in 2012.

The above factors were the primary contributors to the Group's year-on-year changes in revenue for 1H 2013.

1H 2013 Financial Results

Consolidated revenue of the Group in the reporting period was US$ 467.8 million, compared to US$ 541.1 million in 1H 2012. Majority of the Group's revenue comes from stevedoring services, which yielded US$ 362.9 million in H1 2013, compared to US$ 434.9 million in 1H 2012.

Stevedoring revenue was mainly influenced by lower crude oil and grain volumes in 1H 2013. Year-on-year declines in revenue from these cargoes comprised US$ 24.9 million and US$ 61.8 million, respectively. Higher oil products handling increased revenue from this cargo year-on-year by US$ 18.6 million. Other cargoes and services decreased stevedoring revenue by an additional USD $3.9 million year-on-year.

Revenue from other port services, fleet services, other services and ship repairs was largely unchanged year-on-year.

The Group was successful at managing costs during the reporting period. Cost of services and SG&A for 1H 2013 remained nearly unchanged year-on-year, despite an indexation of wages early in 2013 under the new collective labour agreement.

NCSP Group's 1H 2013 EBITDA was US$ 251.6 million, compared to US$ 318.6 million in 1H 2012. The primary reason for the year-on-year decline in EBITDA was weaker stevedoring services revenue, which brought 1H 2013 EBITDA down by US$ 66 million year-on-year.

Operating profit for 1H 2013 totaled US$ 209 million compared to US$ 280.5 million in 1H 2012.

Profit for the period was supported year-on-year by a decrease in finance costs of US$ 17.8 million, an increase in interest income on deposits and loans issued of US$ 8 million, and the recognition of deferred tax benefits of US$ 21.8 million, primarily due to the recognition of future tax benefits related to foreign exchange losses.

The main factor behind the decline in profit for the period was a foreign exchange loss of US$ 129.2 million related to the Group's foreign-currency denominated assets and liabilities as a result of the weakening of the rouble to the US dollar from RUB 30.4/US$ at 31 December 2012 to RUB 32.7/US$ as of 30 June 2013. 

The Group's profit for 1H 2013 amounted to US$ 13.9 million.

NCSP Group's net debt decreased to US$ 1,871 million as of 30 June 2013, from US$ 2,019 million at the beginning of the year.

Conference call and webcast

NCSP Group will host a conference call and webcast for investors & analysts on 29 August 2013 at 17:00 Moscow time (14:00 London / 09:00 New York).

The call will be held in Russian, with simultaneous translation into English on a separate line.

The call will be hosted by:

· Igor Terentyev, Executive Director, PJSC NCSP

· German Kachan, Deputy General Director for Finance and Economics (CFO), PJSC NCSP

· Evgeniya Tyurikova, Advisor to Director of PJSC NCSP Moscow Office

· Mikhail Shchur, Investor Relations Director, PJSC NCSP

Webcast link: https://engage.vevent.com/rt/nmtp~ncsp_1h 

Conference call dial-ins:

+7 499 922 8667 Moscow

+44 (0) 1452 555 566 London

+1 631 510 7498 New York

Toll Free:

8108 002 097 2044 Russia (Moscow only)

0800 694 0257 UK

1 866 966 9439 USA

Russian call conference ID# 37171684

English call conference ID # 40745736

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). 50.1% shares of PJSC "NCSP" belong to Novoport Holding Ltd, the beneficial owners of which are OJSC "Transneft" and Summa Group. NCSP Group cargo turnover in 2012 totalled 159million tonnes. Consolidated revenue according to IFRS in 2012 totalled US$ 1,034 million and EBITDA was US$ 591.5 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; [email protected] 

Mikhail Shchur, Investor Relations; [email protected]