Financial Results

In 2020, in the face of uncertainty and severe macroeconomic instability, the Company demonstrated an increase in operating and financial results, strengthened the position in the industry, continued to expand the network of routes and improve the quality of customer servicesThe review provides an analysis of TransContainer’s data (combined with subsidiaries) based on consolidated financial results for 2020 in accordance with international financial reporting standards (IFRS)..

The financial results are based on:

  • the Company’s success in provision of production assets for the business, i.e. the average railcar fleet had been increased by 14.6% compared to 2019 with a railcar turnover speedup to 11.9 days (−3.9% year-on-year), a technology was adopted to exchange the railcar fleet with partner companies and to use the third-party containers in scope of up to 8% of the Company’s fleet;
  • development of operations in a number of market segments: increasing traffic volumes in cooperation with the Vostochniy port, the return of the Company to the transit market through Kazakhstan for the first time since TransContainer withdrawal from JSC UTLC and sale of JSC Kedentransservice;
  • increase in management and operational efficiency – a record-high level of labour productivity was achieved in transportations (745 TEUs / person-year, +19.9% compared to 2019) and adjusted revenue (RUB 1,024 thousand / person-month, +10.1% compared to 2019), and the container empty run ratio was minimum for the last five years (17.0%, −0.2 p. p. year-on-year).
Key Financial Indicators of the Company (RUB mln)
Item 2020 2019 Year-on-year change
RUB mln %
Total revenue 103,497 86,179 17,318 20.1
Adjusted revenueAdjusted Revenue is calculated as total revenue less cost of integrated freight forwarding and logistics services. 40,776 37,896 2,880 7.6
Adjusted expensesAdjusted Operating Expenses are calculated as operating expenses less cost of integrated freight forwarding and logistics services. 26,701 23,286 3,415 14.7
EBITDAEBITDA is defined as profit for the period before income tax, interest expense and depreciation and amortisation. 22,645 19,987 2,658 13.3
Adjusted EBITDA marginAdjusted EBITDA Margin is defined as EBITDA divided by Adjusted Revenue. (%) 55.5 52.7 - 3 p. p.
Profit for the period 12,659 11,750 909 7.7
Adjusted net profit marginAdjusted EBITDA Margin is defined as EBITDA divided by Adjusted Revenue.(%) 31.0 31.0 - 0 p. p.
Debt 63,223 22,352 40,871 182.9
Net debtNet Debt is calculated as long-term debt, finance lease obligations, short-term debt and current portion of the long-term debt less cash and cash equivalents. 54,631 18,772 35,859 191.0
LTM EBITDALTM EBITDA is calculated as EBITDA for the past 12 months. 22,645 19,987 2,658 13.3
Net debt / LTM EBITDA 2.41 0.94 1.47 -
Equity capital 22,509 48,434 –25,925 –53.5
Return on equity (%) 56.2 24.3 - 32 p. p.

The volumes of revenue-generating transportations controlled by the Company increased by 16.2% year-on-year, to 1,946 thousand TEUs, and the adjusted revenue raised by 7.6% year-on-year and amounted RUB 40,776 mln with net revenue of 12,659 mln (7.7% increase year-on-year).

The key indicators of the Company’s economic efficiency – net profit margin and return on equity – were 31.0 and 56.2% correspondingly.

As at 31 December 2020, the Company’s total debt was RUB 63,223 mln with net debt of only RUB 54,631 mln, bringing the net debt to EBITDA ratio to 2.4x.

Key Financial Indicators of the Company (RUB mln)
Item 2020 2019 Year-on-year change
RUB mln %
Total revenue 103,497 86,179 17,318 20.1
Other operating income 1,224 1,161 63 5.4
Operating expenses –89,422 –71,569 –17,853 24.9
Operating profit 15,299 15,771 –472 –3.0
Interest expenses –1,856 –1,118 –738 66.0
Interest income 522 368 154 41.8
Foreign exchange gain, net 292 –229 521 –227.5
Share of result of associates and JVs 102 583 –481 –82.5
Other financial results, net 1,861 21 1,840 8,761.9
Profit before income tax 16,220 15,396 824 5.4
Income tax expenses –3,561 –3,646 85 –2.3
Profit for the period 12,659 11,750 909 7.7
Other comprehensive income 1,239 –555 1,794 –323.2
Remeasurements and other reserves for post-employment benefit plans 144 –131 275 –209.9
Exchange rate differences from the conversion of other foreign divisions into the presentation currency 212 –75 287 –382.7
Share in the conversion of financial information on joint ventures into the presentation currency 883 –349 1,232 –353.0
Total comprehensive income 13,898 11,195 2,703 24.1

Adjustments and Additional Financial Information

The majority of the TransContainer’s services are provided with the use of third-party services. Accordingly, third-party charges for such services are presented within the Company’s revenues and expenses. In particular, such charges include the value of railway tariffs and the third-party charges related to principal activities.

Third-party expenses, including railway tariff, are included in operating expenses on the services of third-parties belonging to core activities.

For analytical purposes, the Company includes the third parties’ share in the Company’s revenues and expenses.

Adjusted Revenue (RUB mln)
Item 2020 2019 Year-on-year change
RUB mln %
Total revenue 103,497 86,179 17,318 20.1
Third-party charges related to principal activities –62,721 –48,283 –14,438 29.9
Adjusted revenueRevenue less cost of co-contractors. 40,776 37,896 2,880 7.6

Adjusted Revenue Related to Integrated Freight Forwarding and Logistics Services (RUB mln)
Item 2020 2019 Year-on-year change
RUB mln %
Integrated freight forwarding and logistics services 96,665 79,895 16,770 21.0
Third-party charges related to integrated freight forwarding and logistics services –62,721 –48,283 –14,438 29.9
Adjusted revenue related to integrated freight forwarding and logistics services 33,944 31,612 2,332 7.4

Operating Expenses Adjustment (RUB mln)
Item 2020 2019 Year-on-year change
RUB mln %
Operating expenses 89,422 71,569 17,853 24.9
Third-party charges related to principal activities –62,721 –48,283 –14,438 29.9
Adjusted operating expenses 26,701 23,286 3,415 14.7

Some items used, such as adjusted revenue, adjusted operating expenses, EBITDA, adjusted EBITDA margin and adjusted net profit margin, are not IFRS financial metrics and constitute supplementary indices of the Company’s operating activities. They are used as additional analytical tools with limited applicability, so they shall be used neither separately nor together instead of IFRS metrics.