FESCO posts operational and financial results for the 1Q Ended March 31, 2016
FESCO Transportation Group announces its operational and consolidated IFRS results for three-month period ended March 31, 2016.
• Russia’s ongoing economic downturn, the current global geopolitical challenges and increasing competition in the freight market continued to negatively affect FESCO’s operational results in 1Q 2016
• In general, the transportation market in the Russian Far East demonstrated negative trends in 1Q 2016. Container transportation volumes decreased while general cargo transportation volumes slightly improved
• In 1Q 2016, the Group continued to implement cost optimization measurers, including further production and administrative cost savings as well as sale and renting out of non-core assets
• In March 2016, Transgarant signed an agreement with NefteTransService group for the long-term operating lease of 6,085 gondola cars. The agreement is intended to help the Group optimize costs and provide an additional source of revenue
• In April 2016, the Group announced that in light of the current macroeconomic environment the Group’s debt restructuring is necessary. FESCO is in the process of negotiating with holders of its Eurobonds and Rouble bonds, and other lenders
Operational Overview
• FESCO port and liner container volumes declined due to unfavorable market conditions, as well as decreased trade turnover with foreign partners in Russia:
• Container handling volumes at VMTP decreased by 21.6% YoY to 70.6 thousand TEU
• Export-import liner volumes decreased by 26.6% YoY to 62.2 thousand TEU
• Intermodal transportation volumes decreased by 28.4% YoY to 33.1 thousand TEU
• General cargo volumes at VMTP increased by 7.0% YoY to 596.8 thousand tons
• Rail container transportation volumes declined by 16.7% YoY to 63.4 thousand TEU. Rail cargo load declined by 6.4% YoY to 4.4 million tons
