Financial and operating results of FESCO Transportation Group for 2019

25 May 2020

FESCO Transportation Group (the “Group” or “FESCO Group”) announces its operating and consolidated financial results for the twelve months ended 31 December 2019. The Group also informs that all audit procedures regarding 2019 IFRS consolidated financial statements have been completed. For the full version of the financial statements with notes, see the Investor Relations section of our website


  • The Group reports an expansion across its core business lines, with intermodal transportation on the East–West route increased to 46% and handling in Russia’s Far East via Commercial Port of Vladivostok (the “Port”) to 44%:

    • intermodal transportation grew to 344 thousand TEU (up 14% YoY);

    • handling volumes at the Port reached an all-time high, with 11.5 million tonnes of cargo handled in 2019 (up 10% YoY), including record-breaking 625 thousand TEU of containers and 5.1 million tonnes of general cargo.

  • The Group reduced delivery time for cargoes along the key Shanghai–Moscow route to 24 days, two times faster than the sea route via the Suez Canal.

  • Together with RZD Logistics, the Group launched Trans-Siberian Landbridge, a joint service for express delivery of transit cargoes from the Asia Pacific to Europe via Vladivostok over the Trans-Siberian Railway.

  • In line with its strategy of expanding its land network, FESCO introduced railway routes from China to Russia via Mongolia, from Russia to China via the Grodekovo/Suifenhe land border crossing and China-to-Germany and return transit trains via Kaliningrad and Germany-to-China transit trains via the Far East.

  • The Group launched an intermodal container service for cargo delivery from Russian cities to the Kuril Islands via the Far East.

  • FESCO introduced new container trains for deliveries across Russia – from Yekaterinburg to St Petersburg and from St Petersburg to Novosibirsk.

  • The Group’s net debt / EBITDA ratio decreased to 3.7x (excluding IFRS 16 impact).

  • The Group sold its non-core assets – all gondola cars and pellet hoppers and part of the old fleet. FESCO also entered into a preliminary sales and purchase agreement for the grain transportation business (TRANS-GRAIN and related assets).

  • FESCO signed a contract to procure five cranes for the Port, purchased two container vessels, concluded a contract for an ice-class universal vessel, expanded its fleet of fitting platforms to 6,620 units and entered into an agreement with Russian Railways to acquire the remaining stake in Russkaya Troyka that is not under the Group’s control.

  • The Group started a partnership with the National Centre for Antarctic and Ocean Research under the Ministry of Earth Science of India to deliver supplies to the Indian research stations in Antarctica. Over 4 thousand tonnes of supplies have been transported by the diesel-electric ship Vasiliy Golovnin.

  • FESCO partnered with Russian Railways to launch electronic processing for intermodal transportation of imports resulting in the processing time at Commercial Port of Vladivostok shortened from 5 days to 21 hours.

  • The Group continued building up its supply chain management in 3PL and 4PL segments, having significantly grown its order portfolio.

The Group’s operating results




Change, %

Intermodal transportation, kTEU




International maritime transportation, kTEU [1]




Domestic maritime transportation, kTEU




VMTP container handling, kTEU




VMTP general cargoes handling, kt

5 283

5 526


Vehicles handling (thousand units)




Rolling stock (units)

11 925

12 723


Rail container transportation, kTEU*




Shipments in box cars, units

14 231

16 372


Transport fleet, units




Operable vessel days [2]

7 096

7 208


Bunkering volumes, kt




*excluding the platforms operated by Russkaya Troyka

The Group's financial results

Indicator, RUB m



Change, %


56 993

56 673



10 572

12 231


EBITDA margin, %



3 pp

Net profit / (loss)

7 009

(1 842)


  • In 2019, the Group’s consolidated revenue stood at RUB 56,673 million (almost flat YoY). This is attributable to a decrease in the Rail Division’s revenue due to worsened market conditions in grain transportation. FESCO has taken steps to divest from this business segment. Meanwhile, the other divisions reported a rise in revenues.

  • In 2019, the Group’s consolidated EBITDA increased to RUB 12,231 million (up 16% YoY). The growth was largely driven by the Liner and Logistics Division and the Port Division.

  • The Group’s EBITDA margin reached 22% (up 3 pp YoY).

  • In 2019, FESCO’s net loss was RUB 1,842 million, resulting from exchange differences on intra-group liabilities. Exchange differences are caused by the volatility of the exchange rates.

Financial and operating performance by divisions

Liner and Logistics Division

Financial performance

  • Revenue grew to RUB 37,944 million (up 6% YoY) driven by an increase in intermodal transportation volumes.

  • EBITDA reached RUB 2,309 million (up 83% YoY) on the back of the following:

    • increase in the number of vessel calls at the Chinese and Korean lines;

    • shorter delivery times driven by accelerated customs transit clearance, improved railcar turnaround, and electronic records management;

    • growth of shipments via land border crossings.

Operating performance

  • The Group secured a record high intermodal transportation market share of 46% across the East–West corridor, up 7 pp YoY. Intermodal transportation grew to 344 thousand TEU. The growth was driven by:

    • launch of new services;

    • flexible commercial policies thanks to the introduction of a customer ranking system;

    • implementation of IT solutions, including MY.FESCO to help customers order services and track cargo online (in 2019, 60% of all intermodal transportation orders were made online).

  • International maritime transportation slid to 250 thousand TEU (down 20% YoY) following the decision to cut transportation volumes at the Baltic lines due to inefficiency.

  • Domestic maritime transportation fell to 78 thousand TEU (down 2% YoY).

Port Division

Financial performance

  • Revenue went up to RUB 15,409 million (up 17% YoY) on the back of changes in rates and cargo structure, as well as the growth in:

    • container cargo turnover by 13%;

    • general cargo and oil products turnover by 5%;

    • vehicle turnover by 28%.

  • EBITDA grew to RUB 6,787 million (up 15% YoY).

Operating performance

  • Handling volumes at the Port reached an all-time high, with 11.5 million tonnes of cargo handled in 2019 (up 10% YoY), including record-breaking 625 thousand TEU of containers (up 13% YoY).

  • Vehicle handling volumes grew to 77 thousand units (up 28% YoY), which was driven by increased demand for cars in Russia. To improve vehicle handling capacity and reduce handling time, additional Port territory was used.

  • Handling of bulk and general cargoes, including oil products, increased to 5,526 thousand tonnes (up 5% YoY) due to the growth in handling of cast iron, construction materials and slab handling volumes (up 8%, 41% and 70% YoY respectively).

  • The Group handled 2,009 vessels.

  • Average daily fleet handling grew to 31.6 thousand tonnes (up 11% YoY).

  • Handled rolling stock amounted to 200.5 thousand units (up 12% YoY).

  • Average daily rolling stock handling increased to 549 units (up 11.8% YoY).

Rail Division

Financial performance

  • Revenue decreased to RUB 8,232 million (down 30% YoY), mainly as a result of revenue in the grain segment declining to RUB 3,482 million (down 52% YoY) due to changes in the market environment.

  • Revenue in the segment of fitting platforms and box cars increased to RUB 3,922 million (up 23% YoY).

  • EBITDA fell to RUB 3,596 million (down 12% YoY).

Operating performance

  • Railway container transportation volumes increased to 388 thousand TEU (up 14% YoY) as a result of the fleet of fitting platforms expanding to 6,620 units.

  • Shipments by box cars rose to 16,372 units (up 15% YoY) on the back of increased fleet and introduction of new routes.

Shipping Division

Financial performance

  • Revenue grew to RUB 3,245 million (up 17% YoY) thanks to higher rates of the upgraded fleet and an increase in transportation volumes.

  • EBITDA reached RUB 776 million (up 17% YoY).

Operating performance

  • Shipments under contracts with the Russian Ministry of Defence increased.

  • 4 thousands tonnes of cargo were shipped as part of an agreement to support Indian research stations in Antarctica.


Financial performance

  • Revenue improved to RUB 1,191 million (up 17% YoY) as a result of a higher share of oil product sales instead of bunkering on an agency basis.

  • EBITDA increased to RUB 83 million (up 131% YoY).


  • Bunkering volumes declined to 68 thousand tonnes (down 6% YoY) on the back of lower fuel sales to third-party companies as the market was increasingly monopolised by larger players.

  • 90% of total bunkering services were provided to the Group’s companies, with the remaining volumes shipped to foreign vessel owners and charterers.

Financial performance by division

Indicator, RUB m



Change, %

Liner and Logistics Division 


35 875

37 944



1 259

2 309


EBITDA margin



2 pp

Port Division


13 121

15 409



5 889

6 787


EBITDA margin



(1) pp

Rail Division


11 791

8 232



4 094

3 596


EBITDA margin



9 pp

Shipping Division


2 767

3 245






EBITDA margin




Bunkering Division


1 018

1 191






EBITDA margin



3 pp

The Group’s consolidated debt as at 31 December 2019

  • Net debt / EBITDA ratio:

    • (excluding IFRS 16 impact) declined from 4.7x as at 31 December 2018 to 3.7x as at 31 December 2019;

    • (including IFRS 16 impact) declined from 4.4x as at 31 December 2018 to 3.3x as at 31 December 2019.

  • The Group’s RUB-denominated consolidated debt decreased to RUB 39,294 million (down 14% YoY).

  • The Group’s liabilities:

    • RUB 32,632 million in loans;

    • RUB 6,410 million in lease liabilities;

    • RUB 252 million in BO-01 and BO-02 series exchange-traded Russian bonds.

  • The Group completed settlements under an irrevocable public offer to repurchase BO-01 and BO-02 series bonds issued in 2015 and 2013 respectively [4]. The offer resulted in a buy-back of 6,658 bonds of BO-01 series from 22 investors and 29,942 bonds of BО-02 series from 112 investors. Remaining outstanding today are less than 1% of the initial volume at par value. In 2019, the Group was unable to repay its bonds that remained outstanding due to circumstances beyond the Group’s control.

Indicator, RUB m    





(Cash and cash equivalents)

(3 313)


(1 232)


Debt obligations and finance lease liabilities, including [5]

45 647


39 294



4 695

6 659


40 952

32 635

Net Debt

42 334


38 063


Financial and operating results of FESCO Transportation Group for 2019


In these materials, the term "FESCO" shall mean FAR-EASTERN SHIPPING COMPANY PLC.

The terms "FESCO Group", the "Group" and "Company" shall mean FESCO and any legal entities controlled directly and/or indirectly by FESCO (controlled entities).

The terms “Port” and “Port Division” refer to the Commercial Port of Vladivostok which is a part of the Group.

These materials are not intended to and do not constitute investment advice. These materials do not constitute or form any part of and should not be constructed as an offer or commitment to sell or issue, a solicitation, recommendation, commitment or invitation to subscribe for, underwrite or otherwise acquire, and should not be construed as an advertisement for, any securities of FESCO or any member of its group in any jurisdiction or an inducement to enter into investment activity in any jurisdiction.

These materials have been prepared on the basis of the Group’s management accounts. These materials do not contain sufficient information to constitute a full set of financial statements. The numbers presented in this statement have not been audited.

[1] The decrease due to the decision to cut transportation volumes at the Baltic lines due to inefficiency

[2] Total number of days in which the vessel was available for operation, excluding downtime due to the vessel's overhaul, upgrade, dry docking, and specialised or intermediate maintenance.

[3] EBITDA is calculated as operating profit net of amortisation, depreciation, and the impact of asset write-offs and one-off expenses.

[4] BO-01 series interest-bearing documentary non-convertible exchange-traded bonds payable to bearer subject to centralised deposit, identification number: 4B02-01-00032-A dated 5 May 2010 and BO-02 series interest-bearing documentary non-convertible exchange-traded bonds payable to bearer subject to centralised deposit, identification number: 4B02-02-00032-A dated 5 May 2010.

[5] Loans and obligations do not include operating lease obligations, so to calculate ratios, adjusted EBITDA excluding the impact of the IFRS 16 adoption is also used.