Transport Trade Services (TTS) H2 2024 earnings summary

Executive summary

• 2024 was marked by unprecedented market challenges, including the near disappearance of Ukrainian agricultural flows and weak Danube basin exports, leading to a significant drop in transported and managed volumes.

• Revenue fell 36.8% year-over-year to RON 733.8 million, with net profit down 93% to RON 21.3 million and EBITDA down 68.1% to RON 139.6 million, reflecting severe market headwinds and a sharp drop in cargo volumes, especially agricultural and mineral goods.

• Metallurgical raw material flows declined due to EU decarbonization policies and lack of industrial policy, while overcapacity in transport services led to rapid price decreases and lower demand.

• The group maintained a strong capital structure, with a share capital increase to RON 180 million and a dividend distribution of RON 68.4 million.

• Total assets decreased 4.7% to RON 1,276.0 million, while net assets declined 2.9% to RON 1,055.1 million; total liabilities dropped 12.5% to RON 221.0 million.

Financial highlights

• Revenue decreased by EUR 400 million and EBITDA by nearly EUR 300 million year-over-year, reflecting lower volumes, especially in port operations.

• Total volume dropped from 15.5 million tons in 2023 to 11.81 million in 2024.

• Net profit: RON 21.3 million (▼93.0% vs. 2023); EBITDA: RON 139.6 million (▼68.1% vs. 2023).

• Despite lower operational expenses (down EUR 133 million), the revenue decline outpaced cost savings, resulting in lower net profit.

• Margins for 2024: EBITDA margin 14.4%, profit margin 12.8%.

Outlook and guidance

• 2025 budget assumes slight revenue growth, mainly from minerals and chemicals, while agricultural volumes are expected to remain low.

• No significant recovery in Ukrainian agricultural cargo flows is expected; Danube basin exports may restart in H2 if market conditions improve.

• Mineral product volumes are expected to rise due to existing contracts, especially for non-EU destinations.

• Chemical product flows are projected to remain stable or grow slightly, with growth tied to fertilizer demand and Decirom's integration.

• Expenses for consumables, salaries, and amortization are budgeted to decrease by 2-6%.