Full-Year 2024 Results
05.03.2025
Globaltrans Investment PLC (the “Company” and together with its consolidated subsidiaries “Globaltrans” or the “Group”) (AIX ticker: GLTR) today announces its financial and operational results for the year ended 31 December 2024.
The Company will hold an online investor event on 5 March 2025 at 14:00 Astana time (12:00 Moscow time). Webcast: https://us06web.zoom.us/webinar/register/WN_4RbdRZJfQ-Kw3hRem2Zq1Q#/registration.
In this announcement, the Group has used certain measures not recognised by International Financial Reporting Standards (“IFRS”) (referred to as “non-IFRS measures”) as supplemental measures of the Group’s operating performance. The management believes that these non-IFRS measures provide valuable information to readers, because they enable them to focus more directly on the underlying day-to-day performance of the Group’s business. However, these non-IFRS measures have limitations as analytical tools, and you should not consider them in isolation or place undue reliance on them. Similarly, titled measures are used by other companies for a variety of purposes and are often calculated in ways that reflect the circumstances/factors of those companies. You should exercise caution in comparing these measures as reported by us to the same or similar measures as reported by other companies. Certain financial information which is derived from the management accounts is marked in this announcement with an asterisk {*}. Information (non-IFRS financial and operating measures) requiring an additional explanation or defining is marked with initial capital letters and the explanations or definitions are provided at the end of this announcement. The presentational currency of the Group’s financial results is the Russian rouble (“RUB”).
MARKET REVIEW AND KEY TRENDS[1]
Freight rail transportation market is under significant pressure from operational challenges and an oversupply of railcars
Overall industry freight rail turnover and transportation volumes decreased 4.3% and 4.2% year on year in 2024.
A persistent downward trend prevailed in the market throughout 2024, driven by both operational challenges and a reduction in the cargo base. In January-February 2025, overall industry transportation volumes declined 5.6% year on year.
Continued infrastructure constraints due to the changes in logistics, a shortage of throughput capacities and an increase in the size of the industry railcar fleet.
Average industry railcar turnaround increased 11% year on year to c.21 days in 2024 (the weakest level over the last 15 years), which negatively impacts the efficiency of railcars.
Over the past 5 years, the industry freight railcar fleet has increased 18%[2], while overall industry transportation volumes declined 5% compared to 2020.
According to the estimation of the rail infrastructure owner, the railcar oversupply surged from c.200,000 units in September 2024 to c.400,000 units in early February 2025 (about 29% of the industry railcar fleet). In response, the rail infrastructure owner is implementing a range of measures to reduce the number of railcars on the network.
Intensifying cost pressures for freight rail operators, including the increased regulated tariffs for the traction of empty railcars (which rose by 10.75% from December 2023, then by 13.8% from December 2024, and by an additional 10% for empty gondola cars only from January 2025) along with a rise in the costs of repairs and spare parts.
Gondola segment: intensifying operational challenges, shrinking cargo base and pricing pressures
Overall industry transportation volumes of bulks (mostly transported in gondola cars)[3] decreased 6.9% year on year in 2024.
Gondola segment is a key market for Globaltrans (68% of the Group’s Total Fleet) and one of the most competitive segments in the industry.
The industry gondola fleet reached a historical high of c.649,000 units[4], while overall industry bulk cargo volumes are at multi-year lows[5], which results in an oversupply of railcars. Net additions of gondola cars to the network amounted to 4%, or c.26,000 units, in 2024, while the industry gondola fleet rose 16%, or by c.92,000 units[6], over the past 5 years.
Overall transportation volumes in the key bulk cargo segments decreased throughout 2024 due to ongoing operational challenges, a shortage of throughput capacities and a shrinking cargo base: coal (-5.1% year on year), metallurgical cargoes (-5.4% year on year) and construction materials (-12.9% year on year)[7].
In the second half of 2024, market pricing conditions began to deteriorate due to the challenging operational environment and oversupply of railcars. This decline extended into early 2025. The downward trend is expected to continue in the medium term.
Regulatory initiatives pose major risks to freight rail operators
The potential shortening of the useful life of gondola cars is currently under discussion. If approved, the decision to shorten the useful life of gondola cars will lead to the early retirement of the existing gondola car fleet on the network.
For Globaltrans, this poses risks of early retirement for a large part of its fleet and substantial additional costs for fleet replacements.
In the event of the shortening of the useful life of standard gondola cars by 3 years (from 22 years to 19 years), the Company estimates that the retirements of its Owned Fleet (mostly gondola cars) will increase by nearly 55% from 17,500 units to 27,200 units between 2025 and 2029.
Limitations on the operation of empty railcars coupled with more stringent technical standards for railcar capital repairs create risks that Globaltrans may see a reduction in its operational fleet due to the mandatory withdrawal of a part of its fleet from the network. This could also lead to a decrease in the technological efficiency of transportation services along with a deterioration in railcar turnaround, as well as increased costs for the operation of the Group’s rolling stock, including higher costs for repairs and maintenance.
In 2025, the Company anticipates that capital repairs will be required for c.2,600 gondola cars (about 6% of the Group’s owned gondola fleet).
KEY 2024 RESULTS
Operational performance
The Group’s Freight Rail Turnover and Transportation Volumes were down 10% year on year[8], largely reflecting a decline in the number of loaded trips per railcar due to operational challenges and a deterioration in industry railcar turnaround. A decrease in the gondola segment’s operational performance was partially offset by growth in the liquids segment due to some previously leased-out rail tanks being switched into operation.
In January-February 2025, the Group’s Transportation Volumes fell 17% year on year, driven by the continued operational challenges, a decrease in average rolling stock operated and lower demand in key segments.
The Group’s Total Fleet declined 3% compared to the end of 2023 and amounted to 63,584 units, largely due to a decrease in the number of leased-in gondola cars. The average age of the Group’s Owned Fleet is 16.2 years.
Empty Run Ratio for gondola cars improved to 31% compared to 36% in 2023. Total Empty Run Ratio for all types of railcars stood at 43% (2023: 45%).
In the second half of 2024, average pricing terms for all types of railcars started to decrease largely due to the worsening market environment in the gondola segment.
Financial results
Adjusted Revenue was up 6% year on year to RUB 92.7 billion.
Total Operating Cash Costs increased 11% year on year to RUB 38.8 billion.
Adjusted EBITDA was RUB 53.9 billion (+3% compared to 2023).
Total CAPEX adjusted for M&A[9] amounted to RUB 10.6 billion (2023: RUB 10.1 billion).
Free Cash Flow amounted to RUB 26.3 billion (2023: RUB 25.8 billion). However, Free Cash Flow adjusted for expenses related to the acquisition of GDRs[10] decreased by 51% year on year to RUB 12.8 billion.
Profit for the year increased 2% year on year to RUB 39.4 billion.
Negative Net Debt as of 31 December 2024.
INVESTMENTS
Over the next 5 years, the Company will require substantial investments to maintain its current business volumes
Since 2020, the Company has adhered to an opportunistic approach to investments: the acquisition of new railcars has been selective, supported by a minimal level of the Group’s Owned Fleet retirements.
Between 2025 and 2029, the Group expects its Owned Fleet retirements to average c.3,500 units per year based on the current useful life regulation[11]. Most of the railcars to be retired between 2025 and 2029 are gondolas – с.40% of the current owned gondola fleet. As of 31 December 2024, the average age of the Group’s owned gondola fleet is 15.5 years (the useful life of a standard gondola car is 22 years).
The Company estimates that the investments required to purchase 17,500 railcars will amount to about RUB 100 billion.
In 2024, Russia’s railcar production volume hit a five-year high, amounting to nearly 74,900 units[12].
KEY CORPORATE EVENTS
Voluntary GDR tender offers
Globaltrans’ subsidiaries, through the GDR tender offers, along with the affiliates of the Company’s shareholders, via over-the-counter transactions, collectively acquired more than 28% of the Company’s share capital between 8 October 2024 and 24 January 2025[13].
The tender offers provided an opportunity for GDR holders who participated to monetise their investments in Globaltrans amid current financial market infrastructure limitations.
The completed tender offers did not result in a change in the Company’s share capital or a reduction in the number of the Company’s issued and outstanding shares. The GDRs purchased under the tender offers are not subject to automatic cancellation and allow to exercise corporate rights, including a right to vote at general meetings of shareholders, subject to the existing infrastructure restrictions. Accordingly, the tender offers do not affect stakes held by the shareholders of Globaltrans and non-participating GDR holders.
The Company currently has no plans to conduct new voluntary tender offers.
Listings restructuring
In October-November 2024, the Company finalised the voluntary delistings from the Moscow Exchange (MOEX), the SPB Exchange (SPBE) and the London Stock Exchange (LSE).
The Astana International Exchange (AIX) became the sole organised trading venue for the Company’s GDRs.
Re-domiciliation to the Abu Dhabi Global Market
Re-domiciliation from Cyprus to the Abu Dhabi Global Market (ADGM) was completed on 26 February 2024.
The Company’s new Board of Directors was approved by the shareholders at the Extraordinary General Meeting (EGM) of Globaltrans held on 4 April 2024.
Dividend Policy termination
Due to the continued technical limitations and various constraints on financial infrastructure, the Company’s Board of Directors terminated the Dividend Policy on 29 August 2024.
DOWNLOADS
All information materials are available on the Globaltrans’ corporate website (www.globaltrans.com).
- FY2024 Results Announcement (full version)
- FY2024 Results Presentation
- Consolidated Management report and consolidated financial statements for the year ended 31 December 2024
INVESTOR EVENT
The release of the Group’s financial and operational results will be accompanied by an online investor event.
Date: Wednesday, 5 March 2025.
Time: 14:00 Astana / 12:00 Moscow / 09:00 London / 13:00 Abu Dhabi.
Event language: There will be a simultaneous translation of the webcast with both English and Russian available.
Webcast:https://us06web.zoom.us/webinar/register/WN_4RbdRZJfQ-Kw3hRem2Zq1Q#/registration
Q&A Session: Please note that this will be a listen-only session. Should you have any questions, please submit them by 13:00 Astana time (11:00 Moscow time) on 5 March 2025 to irteam@globaltrans.com.
Replay: A replay of the webcast will be available on the Globaltrans website (www.globaltrans.com) shortly after the end of the live event.
ENQUIRIES
For investors
Mikhail Perestyuk / Daria Plotnikova
+971 2 877 6840
For media
Anna Vostrukhova
+971 2 877 4166
EM
LEGAL DISCLAIMER
Information contained in this announcement concerning Globaltrans Investment PLC, a company organised and existing under the laws of the Abu Dhabi Global Market (the “Company” and together with its consolidated subsidiaries “Globaltrans” or the “Group”) is for general information purposes only. The statements and any opinions presented herein are based on general information gathered at the time of writing and are subject to change without notice.
The information in this announcement is subject to verification, completion and change. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its shareholders, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this announcement. None of the Company nor any of its shareholders, directors, officers or any other person accepts any liability (including, without limitation, any liability for negligence) whatsoever for any loss howsoever arising from any use of the contents of this announcement or otherwise arising in connection therewith. This announcement does not constitute an offer or an advertisement of any securities in any jurisdiction.
This announcement may contain 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”, “estimate”, “anticipate”, “intend”, “will”, “could”, “may”, or “might”, the negative of such terms or other similar expressions. These forward-looking statements include matters that are not historical facts and statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, Globaltrans’ results of operations, financial condition, liquidity, prospects, growth, strategies, and the industry in which the Company operates. By their nature, forward looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and that Globaltrans’ actual results of operations, financial condition, liquidity, prospects, growth, strategies and the development of the industry in which Globaltrans operates may differ materially from those described in or suggested by the forward-looking statements contained in this announcement. In addition, even if Globaltrans’ results of operations, financial condition, liquidity, prospects, growth strategies and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in future periods. The Company does not intend to update this announcement or reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause actual results to differ materially from those contained in forward-looking statements of Globaltrans, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, market changes in the Russian freight rail market, as well as many of the risks specifically related to Globaltrans and its operations. No reliance may be placed for any purposes whatsoever on the forward-looking statements contained in this announcement.
[1] Information in this section is based on public data and the Company’s estimates.
[2] The fleet at the end of 2024 compared to the beginning of 2020.
[3] Including coal, metallurgical cargoes and construction materials.
[4] As of 31 December 2024.
[5] Over the last 15 years.
[6] As compared to the beginning of 2020.
[7] Coal including coke; metallurgical cargoes including ferrous metals, scrap metal and ores; construction materials including cement.
[8] Including Engaged Fleet.
[9] Including maintenance CAPEX.
[10]The expenses related to the acquisition of global depositary receipts (GDRs) in 2024 under the tender offers (excluding the expenses for the acquisition of GDRs undertaken in January 2025).
[11]Excluding the impact of the potential shortening of the useful life of gondola cars, which is under discussion.
[12]Public data, Company estimates.
[13] More details are available on the Globaltrans’ corporate website (www.globaltrans.com).
[14] The expenses related to the acquisition of GDRs in 2024 under the tender offers (excluding the expenses for the acquisition of GDRs undertaken in January 2025).