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September 17, 2012 5:30 pm
Global Ports, the Russian ports operator, reported a 1.5 per cent year-on-year decline in sales in the first half, as the group’s oil terminal business faced new competition.
The London-listed company, which now counts Denmark’s Møller-Maersk as a key shareholder, announced a 12 per cent drop in net profit to $72.5m during the first six months of the year, compared to the same period of 2011. Group revenue dropped from $259.7m to $255.7m.
The company said its oil terminal business had suffered after a new Russian terminal owned by oil trading house Gunvor came online last year and almost immediately secured a 10 per cent market share. Because of the new competition, the group’s oil volumes dropped 31 per cent year-on-year.
However, Global Ports’ management brushed off the recent difficulties, noting that the situation was slowly improving and that business was booming in its more important segment – the shipping of Russian containers.
Revenues for the group’s shipping container unit rose 4.5 per cent year-on-year. The segment now accounts for 70 per cent of the group’s overall business and Global Ports is the Russian leader with a 30 per cent share of the growing market.
With Russia’s gross domestic product forecast to grow at 4 per cent this year by the International Monetary Fund, analysts predict the Russian container market will grow even faster than the economy.
While the container business has been slower to develop in Russia than in Europe and the US, it is beginning to be promoted by local ports who see the method as a cheaper and more efficient way for companies to transport inexpensive and smaller amounts of cargo.
Drewry, the shipping specialist, predicts Russia will be one of the fastest growing markets for container shipping over the next decade, with an average of 10 per cent growth per year.
While Global Ports suffered from increased costs for fuel, electricity and gas, it was able to slash overall costs by 1.2 per cent.
Nikita Mishin, chairman of Global Ports, said the company would continue to expand its container business, with plans to increase container capacity by an additional 20 per cent in the first half of next year.
“The long term prospects for the container market in post-WTO access are considered extremely promising,” he said, noting that the company had “well-invested assets in the right locations” which would help it take advantage of this growth.
Maersk’s decision last week to take a 37.5 per cent stake in Global Ports through its subsidiary APM Terminals has been greeted positively by Russian investors who say Maersk will help increase corporate governance at the company.
In return, Global Ports’ assets in the Baltic region as well as Russia’s far east will allow Maersk to expand its global logistics network.
Global Ports announced it would pay $0.30 per share in dividends – a higher amount than Merrill Lynch analysts expected.
The company’s London-traded global depositary receipts closed 1.3 per cent lower on Monday.
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