Commercial and CAPEX update; dividend outlook extended
27.12.2019
Globaltrans Investment PLC (the “Company” and together with its consolidated subsidiaries “Globaltrans” or the “Group”), (LSE ticker: GLTR) today provides a commercial and CAPEX update, re-confirms its targeted second-half 2019 dividend and extends its dividend outlook to the first half of 2020.
Commercial update
Globaltrans continues to implement its strategy of long-term client partnerships. The Group has extended its service contract with Metalloinvest, a leading global iron ore and HBI producer and supplier, for a further one-year period. From 1 January 2020 Globaltrans will provide at least 70% of Metalloinvest’s freight rail needs, providing both parties with flexibility and aligning the contract with general market practice. As with the previous agreement, the commercial terms will be subject to quarterly revisions.
Furthermore the Group has extended until the end of September 2022 its service contract with Magnitogorsk Iron & Steel Works (“MMK”), one of the world's largest steel producers and a leading Russian metals company. Most of the key terms of the contract remain unchanged and the Group will continue to transport 70% of MMK’s rail freight.
CAPEX and dividends
The Group’s expansion CAPEX plan for 2020 is expected to be limited and principally focused on niche projects. During the coming year, Globaltrans intends to purchase fewer than 1,000 units which will primarily be specialised containers and related flat cars.
Globaltrans’ performance in the second half of 2019 is in line with management expectations which, combined with the Group’s strong cash generation and low leverage, enables the Group to re-confirm the dividend targeted for the second half of 2019 in the amount of RUB 8.3 billion.
Combined with the overall outlook for the coming months, these also give the Group the confidence to extend its dividend outlook into 2020 with the aim of targeting a total dividend for the first half of 2020 of about RUB 8.3 billion.
Valery Shpakov, CEO, commented: “We pioneered the move to long-term client partnerships in our industry and are pleased to continue our successful cooperation with our key clients. With these contract extensions, our strong financial position and our robust performance, we are delighted to be able to provide an update on our dividend outlook, taking it into the first half of 2020.”
ENQUIRIES
Globaltrans Investor Relations
Mikhail Perestyuk / Daria Plotnikova
+357 25 328 860
irteam@globaltrans.com
For international media
Lightship Consulting
Laura Gilbert
+44 7799 413351
Laura.Gilbert@lightshipconsulting.co.uk
NOTES TO EDITORS
Globaltrans is a leading freight rail transportation group with operations in Russia, the CIS and the Baltic countries. The Group’s main business is the provision of freight rail transportation services. Globaltrans provides services to more than 500 customers and its key customers include a number of prominent Russian industrial groups in the metals and mining and the oil products and oil sectors.
The Group had a Total Fleet of more than 70 thousand units at 30 June 2019. Universal gondola cars and rail tank cars constitute the backbone of the Group’s fleet. About 95% of the Total Fleet is owned by the Group with an average age of 11 years.
In the first six months of 2019, the Group’s Freight Rail Turnover (including Engaged Fleet) was 76.1 billion tonnes-km with the total revenue amounting to RUB 47.2 billion.
Globaltrans' global depositary receipts (ticker symbol: GLTR) have been listed on the Main Market of the London Stock Exchange since May 2008. Globaltrans was the first freight rail transportation group with operations in Russia to have an international listing.
To learn more about Globaltrans, please visit www.globaltrans.com
LEGAL DISCLAIMER
Some of the information in this announcement may contain projections or other forward-looking statements regarding future events or the future financial performance of Globaltrans. You can identify forward-looking statements by terms such as 'expect', 'believe', 'anticipate', 'estimate', 'intend', 'will', 'could', 'may' or 'might', the negative of such terms or other similar expressions. Globaltrans wishes to caution you that these statements are only predictions and that actual events or results may differ materially. Globaltrans 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 Globaltrans, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries Globaltrans operates in, as well as many other risks specifically related to Globaltrans and its operations.