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Global Ports’ profits slashed as Russian economic slowdown continues

Russia’s largest container terminal operator, Global Ports, has announced a 53% fall in pre-tax profit in the six months to the end of June compared to the first half of 2014.

Its profit before tax plummeted from US$96m in the first six months of 2014 to US$45.2m in the first half of this year.

Container throughput decreased by 32% year-on-year to 834,000 teu in the first six months of 2015 from 1.2m teu in the first half of 2014.

Revenue fell by 25.2% from US$286.5m in the first half of last year to US$214.3m in the six months to 30 June 2015.

The operator commented that the fall in revenue was to be seen against the backdrop of a macroeconomic slowdown and a sharp devaluation of the Russian rouble.

Tiemen Meester, chairman of Global Ports, said: “The macro-economic backdrop in Russia remained challenging throughout the first half of 2015 affecting consumer demand.”

“We have expanded our EBITDA margin to 72% and limited the decline in Free Cash Flow to 11%, ensuring we continue to generate strong cash flow.”

The container throughput handled by the company fell in each of its Russian ports in the first half of 2015.

First Container Terminal (FCT) saw a 38% drop in volumes from 487,000 teu in the first half of 2014 to 304,000 teu in the same period this year.

Petrolesport (PLP) handled 218,000 teu in the six months to 30 June 2015, a decrease of 35% compared to 338,000 teu in the same period last year.

However, containerised cargo handled in the company’s Finnish ports segment rose by 5% to 128,000 teu in the first six months of 2015.

On 17 August this year, Vladislav Baumgertner succeeded Alexander Nazarchuk as CEO of the Russian port operator.

Meester added: “Looking ahead to the second half of the year, we expect that the market will remain difficult.”

“Nonetheless, Global Ports has excellent assets and a great management team, further complemented by our new CEO’s experience and expertise, and is well-placed to successfully navigate the current market conditions.”