Despite the instability in the world caused by the coronavirus pandemic, FESCO managed not only to maintain its financial stability but also achieved new highs, expanded the network of routes and continued to increase its own assets.
In 2020, FESCO took the first place in the container turnover in Russia – the turnover in VMTP PJSC (member of FESCO Group) amounted to 672 442 TEU (up 8 % YoY).
FESCO increased the intermodal transportation volumes to 393 thousand TEU (up 14 % YoY), set a new record for the domestic maritime transportation turnover for over 80 thousand TEU (up 3 % YoY) and increased the international transportation volume to 293 thousand TEU (up 17 % YoY).
During 2020, FESCO’s management gradually implemented a program for improving production capacities: more than a third of the premises of VMTP PJSC were reconstructed, the vehicle park at all main terminals of the Group was updated, a fleet was acquired, which enabled the company to enter a new transportation segment and perform the first voyage through the Northern sea route.
The Group’s operating results
| Indicator | 2019 | 2020 | Change, % |
| Intermodal transportation, kTEU | 344 | 393 | 14 |
| International maritime transportation, kTEU | 250 | 293 | 17 |
| Domestic maritime transportation, kTEU | 78 | 80 | 3 |
| VMTP container handling, kTEU | 625 | 672 | 8 |
| VMTP general cargoes handling, kt | 5 526 | 4 972 | (10) |
| Vehicles handling (units) | 77 023 | 71 248 | (7) |
| Rolling stock (units) | 12 723 | 8 200 | (36) |
| Rail container transportation, kTEU | 388 | 471 | 21 |
| Shipments in box cars, units | 16 372 | 17 917 | 9 |
| Transport fleet, units | 20 | 18 | (10) |
| Operable vessel days [1] | 7 208 | 6 478 | (10) |
| Bunkering volumes, kt | 68 | 67 | (1) |
Financial performance of the Group
| Indicator, RUB m | 2019 | 2020 | Change, % |
| Revenue | 56 673 | 62 168 | 10 |
| EBITDA [2] | 12 231 | 12 293 | 1 |
| EBITDA margin, % | 22% | 20% | (2 pp) |
| Net profit / (loss) | (1 842) | 8 346 | - |
- Consolidated revenue in 2020 amounted to RUB 62 168 million, which is 10% more than in 2019, mainly due to the increase in cargo turnover in the Port division and the volume growth in the Group’s main services.
- In 2020, the Group’s consolidated EBITDA grew 1% compared to 2019 and reached RUB 12 293 million.
- The Group’s net profit in 2020 was RUB 8 346 million vs the loss in 2019, amounted to RUB 1 842 million.
Financial and operating performance by divisions
Liner and Logistics Division
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Financial performance
- Revenue grew to RUB 46 586 million (up 23% YoY), driven by an increase in intermodal transportation volumes and the international trade shipping rates.
- EBITDA reached RUB 3 270 million (up 42% YoY).
-
Operating performance
- Intermodal transportation volume reached 393 thousand TEU (up 14% YoY), mainly due to launching new regular services, project transportation and expanding the portfolio of customers.
- International maritime transportation volume reached 293 thousand TEU (up 17% YoY). The growth was driven by the management's policy for attracting customers from the traditional transportation routes through the Deep Sea over to the routes going via the ports of the Far East.
- Domestic maritime transportation volume amounted to 80 thousand TEU (up 3% YoY). The growth is driven by the capacity increase of the Group’s main services.
Port Division
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Financial performance
- Revenue went up to RUB 16 326 million (up 6% YoY), mainly driven by the changes in turnover and rates, especially in transshipment of import and export cargoes.
- EBITDA amounted to RUB 7 416 million (up 9% YoY).
- Operating performance
- In 2020, the Group took the first place in container turnover in Russia with the record-breaking turnover of 672 442 TEU (up 8% YoY).
Rail Division
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Financial performance
- Revenue decreased to RUB 5 340 million (down 35% YoY). During 2020, the management gradually implemented the program of selling the non-core assets and expanding the park of fitting platforms. The key stages of the program in 2020 were the withdrawal from the segment of grain transportation in hopper cars and the sale of a 100% share in TransGrain LLC.
- EBITDA amounted to RUB 1 939 million (down 46% YoY).
- Operating performance
- Railway container transportation volumes increased to 471 thousand TEU (up 21% YoY) mainly due to the fleet of fitting platforms expanding within the program for the specialized rolling-stock fleet development.
- Shipments by box cars rose to 17 917 units (up 9% YoY).
Shipping Division
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Financial performance
- Revenue grew to RUB 3 338 million (up 3% YoY) mainly as a result of adding new multi-purpose vessels to the fleet and successfully completing the expedition to Antarctica for supply of the Indian research stations.
- EBITDA amounted to RUB 1 005 million (up 29% YoY).
- Operating performance
- Total operating vessel-day volume amounted to 6 478 (down 10% YoY).
Bunkering
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Financial performance
- Revenue amounted to RUB 841 million (down 29% YoY). The decline was mainly driven by the introduction of new environmental requirements for the transition to low-sulfur marine fuel, as well as the growth of bunkering on an agency basis instead of the oil products sales.
- EBITDA amounted to RUB 12 million (down 85% YoY).
- Operating performance
- Bunkering volume declined to 67 thousand tonnes (down 1% YoY).
Financial performance by divisions
| Indicator | 2019 | 2020 | Change, % |
| Liner and Logistics Division | |||
| Revenue | 37 944 | 46 586 | 23 |
| EBITDA | 2 309 | 3 270 | 42 |
| EBITDA margin | 6% | 7% | 1 pp |
| Port Division | |||
| Revenue | 15 409 | 16 326 | 6 |
| EBITDA | 6 787 | 7 416 | 9 |
| EBITDA margin | 44% | 45% | 1 |
| Rail Division | |||
| Revenue | 8 232 | 5 340 | (35) |
| EBITDA | 3 596 | 1 939 | (46) |
| EBITDA margin | 44% | 36% | (7 pp) |
| Shipping Division | |||
| Revenue | 3 245 | 3 338 | 3 |
| EBITDA | 776 | 1 005 | 29 |
| EBITDA margin | 24% | 30% | 6 pp |
| Bunkering Division | |||
| Revenue | 1 191 | 841 | (29) |
| EBITDA | 83 | 12 | (85) |
| EBITDA margin | 7% | 1% | (6) |
The Group’s consolidated debt as of 31 December 2020
- Net debt/ EBITDA ratio:
- (excluding IFRS 16 impact) declined from 3.7х as of 31.12.2019 to 2.8х as of 31.12.2020
- The Group’s RUB-denominated consolidated debt declined to RUB 33 692 million (down 17% YoY). (на 17% ниже уровня 2019 года).
- The Group’s liabilities:
- RUB 31 732 million in loans
- RUB 1 960 million in lease liabilities
31.12.2019 EBITDA 31.12.2020 EBITDA Indicator, RUB m (Cash and cash equivalents) (1 232) (0,1х) (4 140) (0,4х) Debt obligations and finance lease liabilities, including [3] 39 294 3,4х 33 692 3,2х Short-term 6 659 8 484 Long-term 32 635 25 208 Net Debt 38 063 3,3х 29 552 2,8х Key еvents subsequent to the reporting date
In April 2021, FESCO signed a loan agreement with VTB Bank in the amount of RUB 25.8 billion (USD 323 million) to refinance its current liabilities. The received funds are directed to repay the main part of the current financial debt to VTB Bank. As a result of the transaction, the Group received more comfortable debt service conditions: decrease of the interest rates, changes in the currency composition of the debt that will ensure the natural hedging of foreign exchange risks, extension of the maturity dates for the principal debt repayment up to and including 2027and reduction of the amount of quarterly payment.
[1] Total number of days in which the vessel was available for operation, excluding downtime due to the vessel's overhaul, upgrade, dry docking, and specialized or intermediate maintenance.
[2] EBITDA is calculated as operating profit net of amortisation, depreciation, and the impact of asset write-offs and one-off expense, and includes the impact of IFRS 16.
[3] Lease liabilities do not include the liabilities, where until 1 January 2019 the lease was considered operating before IFRS 16 came into force, so to calculate ratios, adjusted EBITDA excluding the impact of the IFRS 16 adoption is also used.