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Mostotrest publishes 2019 results


PJSC Mostotrest (Mostotrest, the Company or, together with its consolidated subsidiaries, the Group) publishes financial and operating results for the year 2019(a).

Key Operating and Financial Results:

  • Backlog(b) was RUB280.4* billion, an increase of RUB147.4 billion year-on-year, driven by new projects(c)
  • Revenue decreased by 31% from RUB206.3 billion for 2018 to RUB142.6 billion for the reporting year, due to a reduction in construction volumes
  • Gross profit was down 22% from RUB23.2 billion for 2018 to RUB18.1 billion for the reporting year. Gross profit margin increased from 11.2% for 2018 to 12.7% for 2019, driven by efficient cost control and a reduction in the share of subcontracted volumes(d)
  • EBITDA(e) fell by 25% to RUB10.0 billion. EBITDA margin was 7.0%, up from 6.5% for 2018
  • Net profit decreased by 70% to RUB0.5 billion, due to a reduction in operating profit
  • Capex totalled RUB4.1* billion, down from RUB 4.6* billion for 2018
  • Net debt was RUB15.0 billion, up from RUB6.1 billion for the previous year, mainly driven by an increase in long-term bank loans.
  • Mostotrest PJSC Vladimir Vlasov comments on the results:

“2019 was an intense production year for the Group. We continued the construction of the Crimean Bridge and, as a year earlier, fulfilled all our obligations despite many difficulties, making sure that the railway part of the bridge opens to traffic at the end of the reporting year. We also completed the construction of the Sokolnicheskaya metro line extension from the Salaryevo Station to the Stolbovo Station, the Kaluzhskoye Avenue tunnel, the split-level traffic interchange in the area of the Stolbovo Transport and Passenger Hub in Moscow, and a number of other facilities in the capital and other Russian regions.

The volume of public tenders last year increased 2.5x to RUB800.7 billion(f), driven by a significant volume spike in the second half of the year. In addition, as at the end of 2019, the average tender size in road construction increased significantly, by 2 times. The Group managed to slightly increase its consolidated backlog. Mostotrest, together with its subsidiary TSM, won 3 of the 5 largest project tenders in 2019, including the construction of the Northeast Throughway section from the Northern Belt Road in the area of ​​the NATI Railway Platform (Oktyabrskaya Railway) (RUB52.0 billion, including VAT), the construction and reconstruction of the M-1 “Belarus” Highway from Moscow to the border with the Republic of Belarus (RUB31.0 billion, including VAT), and the construction of the M-5 “Ural” Highway (Oktyabrsky village bypass with a bridge across the Moscow River, km 28 - km 37 - RUB25.2 billion including VAT).

As regards our financial results, in view of reaching the final stage of a number of large-scale projects and replenishing the backlog with new projects mainly in the second half of the year, construction volumes in the reporting period decreased significantly, which led to a corresponding decrease in profit indicators. At the same time, thanks to efficient cost management, we were able to improve our business profitability.

We expect 2020 to be a challenging year for the national economy as a whole, due to the consequences of the COVID-19 pandemic and the falling oil prices. It is difficult at this time to project the impact of the current crisis on the industry, but we hope that the construction of transport infrastructure will remain among government priorities.”

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a) The press-release has been prepared on the basis of the consolidated financial statements prepared in accordance with the IFRS as at and for the full year ended 31 December 2019 and 2018, 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 full year ended 31 December 2019 and 2018.

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) 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.. 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.

c) Delivered volumes with recognized revenue. Excluding other revenue. Excluding VAT.

d) The share of subcontracted volumes is calculated as the ratio of cost of subcontractor services to revenue.

e) EBITDA is defined as net profit from continuing operations net of income tax, net finance costs and depreciation. 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.

f) Including VAT. Customers: Avtodor, the Federal Roads Agency, Moscow City Construction Department. Company estimates based on information available on the official Russian Federation public procurement information website http://zakupki.gov.ru.

NOTES TO EDITORS

PJSC Mostotrest is the largest diversified company in the field of infrastructure construction, with a presence across all key and related market segments, and a participant in pioneering public-private partnership projects in Russia. According to the EMBS Group, an independent industry consultancy, Mostotrest 2018 share of the Russian transport infrastructure construction market was 15%.

The Mostotrest Group key business segments include construction and reconstruction of bridges (including road, railway and city bridges), highways and other transport infrastructure, as well as road repair and maintenance services. In 2012, the Group diversified into a new business segment of road concession management.

The Company was established in 1930 for the construction of special and extra-large bridges.

Currently, Mostotrest is involved in a number of complex integrated transport infrastructure development projects, such as construction of several segments of the M-1 “Belarus” Highway, construction and reconstruction of segments of the M-5 “Ural” Highway, and the development of Moscow transport infrastructure.

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

Full press-release