Globaltrans Investment (GLTR) H1 2024 earnings summary

Executive summary

• Rail freight market in H1 2024 experienced a downward trend, with industry freight turnover down 6% and volumes down 3% year-over-year, and further declines in July.

• Revenue for H1 2024 rose to RUB 55.0bn, up 5.9% year-over-year, driven by robust pricing and higher operator service volumes.

• Net profit for H1 2024 was RUB 20.1bn, slightly down from RUB 20.9bn in H1 2023, mainly due to higher tax expense and lower finance income from FX.

• Adjusted EBITDA increased to RUB 27.7bn, up 9% year-over-year, reflecting improved operational efficiency.

• Gondola segment, representing about 70% of the fleet, saw bulk cargo volumes drop 7% in H1 and 9% in July, reaching 2015 levels, while the liquids segment showed some offsetting growth.

Financial highlights

• Revenue: RUB 55.0bn (+5.9% YoY); Adjusted revenue: RUB 46.7bn (+7.7% YoY).

• Adjusted EBITDA: RUB 27.7bn (+9.0% YoY); EBITDA margin improved.

• Net profit: RUB 20.1bn (vs. RUB 20.9bn YoY); EPS: RUB 112.75 (vs. RUB 117.24 YoY).

• Free cash flow: RUB 18.7bn (+57% YoY); Net debt reduced to negative RUB 50.2bn.

• Operating profit: RUB 22.1bn (vs. RUB 19.6bn YoY); profit from sale of subsidiary in prior year was RUB 3.4bn.

Outlook and guidance

• No improvement expected in the gondola segment or bulk cargo volumes in the near to medium term due to commodity market volatility and operational constraints.

• Investment in new rolling stock remains suspended amid high prices and market uncertainty; significant fleet retirements expected between 2025-2029 may require substantial future investment.

• No dividends declared or paid for H1 2024; no plans to resume regular dividend payments in the foreseeable future.

• Corporate income tax rate in Russia will increase from 20% to 25% from January 2025; impact under assessment.