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Globaltrans operating profit down by 16%

Globaltrans announced its financial and operational results for 2013.  The company’s adjusted revenue grew 6% year on year to USD 1,407.3 million, reflecting a further increase in the Group’s average fleet size and a strong performance in the rail tank car segment.

Profit for the year declined by USD 60.0 million or 19% year on year to USD 251.6 million mainly driven by depreciation and amortisation charges that rose by USD 75.5 million due to the consolidation of recent acquisitions and associated long-term service contracts. The operating profit fell by 16%, to USD 451.7 million.

Globaltrans continued its market out-performance, the Group’s Freight Rail Turnover (including Engaged Fleet) increased 13% year on year to 155.5 billion tonnes-km[4] in contrast to the overall market which slipped 1% year on year on the back of macroeconomic headwinds.

Market share gains were achieved with the Group’s Market Share rising to 8.3% from 6.6% in 2012. Operational excellence continued with the Empty Run Ratio for gondola cars at a solid 38%, the lowest annual level in the last five years, meanwhile the Total Empty Run ratio improved to 53% (2012: 57%).  Total Fleet size increased 6% year on year to 65,808 units at the end of 2013 with an average age of Owned Fleet of about 8 years.

“Globaltrans demonstrated a resilient performance in 2013 despite a difficult year for the freight rail transportation industry in Russia brought on by the slowdown in growth rates of the Russian economy.

The Group’s ability to deliver against this backdrop was the result of our robust business model, adaptable strategy and strong execution. Our business model focuses on the balance between our gondola and our rail tank cars being complementary through the different phases of the economic cycle. In addition, our strategy of selective acquisitions of suitable captive rail operators along with long-term service contracts and flawless execution provided us with above-market results in the gondola car segment.

The quality of our service proposition combined with the efficiency of our operations generates strong customer loyalty. This is illustrated by two key developments already in 2014 that have seen the extension of our contract with Metalloinvest by another 19 months to the end of 2016 as well as an increase in the service volume under our long-term contract with MMK (valid to the end of February 2018) from 70% to 80% throughout 2014.

We believe that despite the current macroeconomic environment, the state of development of the Russian freight rail industry continues to offer growth opportunities for well-capitalised and efficient players like Globaltrans.” Sergey Maltsev, CEO of Globaltrans Investment PLC

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