Mostotrest publishes its 1H 2011 financial and operating results
Mostotrest (hereinafter – MSTT or jointly with its subsidiaries Engtransstroy (ETS) and Transstroymekhanisatsiya (TSM) – Mostotrest, the Company or the Group) publishes its 1H 2011 financial and operating results(a).
Mostotrest, the leading Russian infrastructure construction Group, delivered strong operating and financial results, increased its revenues and net profit and won a series of large tenders in 1H 2011. A broad range of competences and high quality of execution enabled Mostotrest to increase its backlog. Following new market trends, the Group pursued implementation of its strategy aiming to develop operations in new business segments.
- Backlog(b) increased by 5% to RUB 247.8 billion(c) from 2010 year-end, against a backdrop of the Group’s strengthening general contracting competence with increased number of projects where Mostotrest acts as a general contractor.
- Awarded three out of five largest transport infrastructure development tenders held in Russia in 1H 2011, for the total amount of RUB 26.1 billion(c), including the integrated project for upgrade, maintenance and rehabilitation of the Voronezh bypass segment of M-4 “Don” Highway, with the contract value of RUB 16.3 billion(c), “Vnukovo” Airport upgrade project with the contract value of RUB 6.3 billion(c), and construction of the Ryazan North Bypass, with the contract value of a RUB 3.5 billion(c).
- 16% revenue growth to RUB 36.4 billion, driven by increased volumes of construction.
- EBITDA(d) marginsteady at 2010 level (12%).
- Profit for the period increased by 86% period-on-period to RUB 1.6 billion.
- Net cash position as at the end of 1H 2011 (cash and cash equivalents less debt), was RUB 5.4 billion. The strong cash position further solidifies the Group’s financial standing and offers a wide range of opportunities for further development.
- Continued to invest, capital expenditures increased 2 times.
«1H 2011 saw a slowdown of growth in the transport infrastructure construction market, with sluggish dynamics of tendering for new large-scale projects, revision of execution schedules for a number of existing major projects and postponement of large tenders previously scheduled for 1H 2011. Specifically, there was virtually no tendering of large transportation infrastructure construction projects in Moscow, due to the ongoing review of the city transportation sector development strategy. Consequently, during the period, we had to adjust to client requirements and flexibly respond to the situation. However, Mostotrest in 1H 2011 produced a resilient performance, achieving further growth and successfully broadening its business competencies to reflect the latest market trends. We further consolidated our leadership in our sector, emerging as the winner in three out of the five largest tenders held in Russia in 1H 2011. In addition, we became the first ever contractor to undertake the full-cycle project envisioning not only road construction but also maintenance and rehabilitation – a new area of expertise for Mostotrest. Anticipating development of the toll road sector in Russia, we entered the new segments of toll road operation and implementation of intelligent transportation systems (ITS) through a joint venture with the Kapsch Group of Austria, an international leader in the development and supply of electronic toll collection systems».
Transport infrastructure development remains an unquestionable priority for the country. Despite sluggish market dynamics in 1H 2011, we are optimistic about the prospects of the Russian transport infrastructure market. Mid-term market development will be supported by priority national and international projects. Anticipating this, and despite revision of construction schedules for a number of the Group’s key projects, in 1H 2011 we continued to invest in development of our production platforms, our highly skilled staff and further expand our core competencies.
Our market leadership, strong backlog, operational versatility and solid financial position together provide an excellent platform for growth and will enable the Group to build a strong and sustainable business going forward.
a) The press-release has been prepared on the basis of the condensed interim consolidated financial statements prepared in accordance with the IFRS as at and for the six months ended 30 June 2011, pro forma financial statements as at and for the six months ended 30 June 2010, 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 2010 and 2011.
Unaudited pro forma financial information can be non-comparable with the consolidated financial information and can not be indicative of future performance, as ETS and TSM were not under common control before 28 June 2010 and 13 May 2010, respectively. In addition, the management accounts can be non-comparable with the consolidated financial statements and pro forma financial statements, each prepared in accordance with the IFRS. Pro forma financial statements should be treated together with the consolidated financial statements of MSTT and its subsidiaries, as well as together with the consolidated financial statements of MSTT and its subsidiaries prepared with respect to the past periods (subject to reasonable adjustments).
The detailed “basis of presentation” description can be found in the Appendix nr. 3 at the end of the press-release.
b) Backlog is not a measure defined by IFRS or RAS. The relevant entity’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.
c) 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
Open Joint Stock Company “Mostotrest”, including OOO “Corporation Engtransstroy” and OOO “Transstroymekhanisatsiya”, is the largest diversified Russian infrastructure construction company and market leader among bridge construction companies of Russia. According to independent industry consultant PMR report, Mostotrest in 2010 had 8.4% of the Russian infrastructure construction market (excluding road maintenance and overhaul).
The Company’s core operations include construction and overhaul of bridges (including highway, railway and city bridges) and highways and other infrastructure facilities.
The Company was founded in 1930 for the construction of extra large bridges. The company has completed over 7,500 infrastructure facilities including bridges, foot bridges, tunnels and complex transport interchanges to date.
Mostotrest is currently working on many important infrastructure projects in Russia, including construction of the infrastructure facilities for the Sochi Winter Olympics 2014, the section of the Moscow Fourth Ring Road, infrastructure facilities on the M-4 “Don” highway and others.
Mostotrest shareholder structure:
38.9% - Marc O’Polo Investments, with beneficiaries including Arkady Rotenberg and top-managers of N-Trans Group: Konstantin Nikolayev, Nikita Mishin and Andrei Filatov;
26.5% - Blagosostoyanie Pension Fund;
34.6% - Free-float.
To learn more on Mostotrest, please visit www.mostotrest.ru.
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.
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