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Mostotrest Announces First Half 2014 Results


 Mostotrest (Mostotrest, the Company or, together with its consolidated subsidiaries, the Group) publishes its financial and operating results for the period ended 30 June 2014(a).

Mostotrest, Russia’s leading integrated transport infrastructure construction group, delivered strong financial results in 1H 2014. Revenue increased by 16% and net profit was up 42% year-on-year.

Key Operating and Financial Results:

  • Backlog(b) increased by RUB16.8* billion(c) to RUB319.7* billion;
  • Revenue rose to RUB52.5 billion, a 16% increase year-on-year, driven by construction volumes growth;
  • Gross profit grew 25% to RUB7.6 billion, compared with RUB6.1 billion in 1H2013. Gross margin increased from 13.4% in 1H2013 to 14.4% in the period under review, driven by the increased share of in-house volumes; 
  • EBITDA(d) grew 5% year-on-year to RUB5.0 billion; 
  • Net profit increased by 42% year-on-year to RUB1.9 billion;
  • 2013 dividend was RUB2.0 billion or 89% of 2013 IFRS net profit announced in June and paid out;
  • Capex increased by 55%, compared to 1H 2013 driven by some large-scale projects that were added towards the end of 2013.

Mostotrest CEO Vladimir Vlasov comments on the results:

“The Group has delivered a strong first half performance, achieving strong revenue and profit growth compared to the same period last year, despite the challenging market conditions. We continue to adopt an appropriate level of caution in our business dealings and in the first half we participated only very selectively in tenders, preferring to focus our resources on a few upcoming tenders that we had identified as priority targets for the Group, specifically the tenders for other segments of the M-11 “Moscow – St. Petersburg” Highway and M-4 “Don” Highway. We expect to hear more about these in the autumn when the bids are awarded along with a number of major tender announcements for infrastructure projects in areas of the country where we have strong links.

The competitive dynamics of the construction infrastructure market continue to challenge the industry and its participants, as witnessed by the fact that a number of high profile competitors got into financial difficulty during the period. Viewed in this context, our own strong financial performance in the first half demonstrates both the stability of our operations and the robustness of our business model.  The diversity and resilience of our business gives us a clear competitive advantage as it provides reassurance to our customers, contractors and staff and means that Mostotrest is well positioned to take full advantage of future tender opportunities and to grow revenues and build its market share”.

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a) The press release has been prepared on the basis of the unaudited consolidated interim condensed financial statements prepared in accordance with the IFRS for the six months ended 30 June 2014 and 2013, as well as on the basis of the management accounts as at and for the same periods, as this set of financial statements in their entirety provide a comprehensive overview of the Group’s performance for the six months ended 30 June 2014 and 2013.

To make the information in the press release user friendly special notes are used. The information based on management accounts is marked with {*}.

The detailed “basis of presentation” description can be found in the Appendix nr. 2 at the end of the press-release.

b) Backlog is not a measure defined by IFRS or RAS. The company’s backlog represents its management’s estimate of the contract value of its projects that remain to be completed as at a particular date, excluding VAT. Such value is calculated as the total contract value for each project that remains to be completed less the amounts already received under the contracts for such projects. The total contract value of a particular project represents the total amount that the relevant entity expects to receive under the contract for such project, assuming the contract is performed in accordance with its terms. A project is included in the backlog of a relevant entity when either a firm letter of commitment is executed by the customer or a letter is received confirming its bid has been successful. Backlog may not be indicative of the relevant entity’s future operating results.

с) Excluding VAT.

d) EBITDA is defined as net profit from continuing operations net of income tax, net finance costs and depreciation. EBITDA is not defined by, or presented in accordance with, IFRS. EBITDA has limitations as an analytical tool, and one should not consider it in isolation, or as a substitute for analysis of the Group’s operating results as reported under IFRS.

NOTES TO EDITORS

Mostotrest is a major, diversified infrastructure construction company, with established presence in all core and related market segments, and a participant in Russia’s first public-private partnership projects. According to EMBS Group, an independent industry consultancy, in 2013 Mostotrest held a 9.9% share of the total Russian infrastructure construction market.

Mostotrest’s core competences include construction and reconstruction of bridges, roads and other transport infrastructure facilities; provision of road maintenance, repair and operating services. In 2012, Mostotrest also entered a new segment: management of road concessions.

The company was established in 1930 as a developer of complex and oversized bridges.

Mostotrest is currently participating in implementation of a number of complex transport infrastructure development projects, such as construction of the head segment (km 15- km 58) and the Vyshny Volochok bypass segment of the M-11“Moscow-St Petersburg” Toll Highway, construction and reconstruction of the M-4 “Don” and M-9 “Baltia” Highways, reconstruction of Mozhaisky Avenue/Kutuzovsky Avenue between the Moscow Ring Road and the Garden Ring; construction of the Businovskaya interchange in Moscow, the Volga Bridge in Nizhny Novgorod and the Voroshilovsky Bridge in Rostov-on-Don.

Mostotrest Ownership Structure:

38.6%: Marc O’Polo Investments;

29.4%: AM companies for Blagosostoyanie Pension Fund;

32.0%: free float.

For more detailed Company information, please visit www.mostotrest.ru 


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 Mostotrest. 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. Mostotrest wishes to caution you that these statements are only predictions and that actual events or results may differ materially. Mostotrest 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 Mostotrest, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, market change in the Russian infrastructure construction market, as well as many other risks specifically related to Mostotrest and its operations.