This outperformance was driven by well-timed investments which ensured there was adequate available capacity to accommodate the market recovery as well as a number of commercial initiatives implemented by the management. This strong operational performance was reflected in the excellent financial results the Group achieved.
Group financial highlights
· Consolidated revenue rose 31% year on year to USD 501.3 million reflecting the significant growth in container handling volumes, improved pricing and changes in the mix of services provided.
· Strict cost-cutting measures implemented by management as well as a degree of operating leverage resulted in Group costs increasing less than revenue growth with total cost of sales, administrative, selling and marketing expenses up just 21% year on year to USD 277.4 million.
· Adjusted EBITDA climbed 37% year on year to USD 282.2* million.
· Adjusted EBITDA Margin reached 56%* compared to 54%* in 2010.
· Profit for the year increased by 23% to USD 146.9 million despite USD 19 million of net foreign exchange losses on borrowings and cash, cash equivalents and loans receivable in 2011.
· Return on Capital Employed (ROCE) increased to 22%* compared to 16%* in the previous year.
· CAPEX on a cash basis increased by 153% year on year to USD 132.0 million reflecting accelerated investments to enable capacity expansion, equipment renewal, and improvement of the services rendered to clients.
· The Group reduced its Net Debt by 53% to USD 66.0* million at 31 December 2011 compared to USD 139.9* million at the end of 2010. Net Debt to Adjusted EBITDA was only 0.2x* at 31 December 2011 compared to 0.7x* at the end of 2010.
· On the basis of the excellent financial results and strong balance sheet of the Group, the Board of Directors recommends an additional dividend payment of USD 32.9 million or USD 0.21 per GDR subject to shareholder approval at the Annual General Meeting. This together with a dividend payment of USD 28.2 million or USD 0.18 per GDR in September 2011 sets the total base dividend for the year 2011 at USD 0.39 per GDR[3]
Operational highlights
· Global Ports’ Russian Ports segment delivered record growth in Gross Container Throughput, up 44% year on year to approximately 1,344* thousand TEUs (twenty-foot equivalent units) in 20114:
· This growth significantly exceeded growth in the overall Russian market which, driven by economic growth and deferred consumer demand, grew 29% year on year to approximately USD 4.5 million TEUs in 20115.
· Global Ports’ market share6 of overall Container Throughput through the Russian Federation Ports market rose to 30%* in 2011 from 27%* in 2010.
· Global Ports’ Oil Products Terminal segment delivered a stable performance with a modest increase of Revenue Per CBM of Storage of 4% in 2011 compared to 2010. Average Storage Capacity increased by 4% year on year due to the additional storage commissioned in 2010.
· The Gross Container Throughput of the Finnish Ports segment in 2011 increased by 2% to 163 thousand TEUs compared to 2010.
Nikita Mishin, Chairman of the Board of Directors of Global Ports, commented:
“It has been a landmark year for Global Ports following our listing, and it gives me great pleasure to announce our Full Year Results for 2011. Over the last 12 months we have built on our successful operational track record by outperforming Russia’s overall container market, improving our terminals and expanding our services. We have had some notable financial successes during the year including operating efficiency as evidenced by growth in Adjusted EBITDA Margin across segments, a significantly enhanced return on capital employed, and reduced net debt – all of which highlight the essential strengths of our business. These achievements are also reflected in our increased dividend. We intend to continue to capitalize on our market leadership and capacity expansion program and deliver value for all our stakeholders in 2012.”
OUTLOOK
Even if the outlook for the global economy remains unpredictable, Global Ports’ management team has a successful track record of operation in all phases of the economic cycle. Our market-leading position in one of the world’s key developing economies means we are well placed to capture future growth opportunities, particularly in the under-penetrated and fast-growing Russian container market.
During the opening months of 2012 the robust macroeconomic context in Russia produced strong trading conditions in the container market with 12% year-on-year market growth recorded in January and February. Against this background we are optimistic about the Russian Ports segment’s prospects for 2012 and will focus on further optimization of our operations and service quality.
In the Oil Products Terminal segment we have capitalized on our position as the only sizable independent fuel oil terminal. We successfully managed recent changes in the industry landscape and are operating at a stable run-rate. We have continued to diversify both our client base and our service mix and as a result, our financial performance in this segment is currently running ahead of the levels achieved in the second half of 2011.
[1] Excluding volumes of inland container terminal Yanino
[2] Source: ASOP (“Association of Sea Commercial Ports”, www.morport.com)
[3] Does not include the USD 25.0 million dividend paid to shareholders in June 2011 prior to the initial public offering of the Company attributable to the previous periods. Each GDR represents an interest in three ordinary shares.