Page 88 - RUSRptAug18

(instead of MAP) and high phosphate-containing NPK. In the second quarter of 2018 , PhosAgro nearly doubled DAP production and increased output of concentrated NPKs by almost 10% y/y, while reducing MAP output by 36% y/y as a reflection of lower demand from the key Brazilian market. The change in the product mix has effectively allowed the company to reduce how much third-party material it processes (potash and ammonium sulfate) and increase the share of its own feedstock in what it produces. Overall, total phosphate-based fertilizer production in the second quarter of 2018 declined by 5% q/q and sales slid 6% q/q, though they were up y/y by a respective 6% and 7%.
9.2.12 Transport corporate news
Russian transportation major Summa Group is understood to be mulling the sale of the Open Port of Nahodka to companies owned by businessman Dmitri Bosov for RUB1.45bn ($23mn), Vedomosti daily said on July 26 citing unnamed sources close to the negotiations. Summa Group is a large investor in transportation assets that include the NSCP, Fesco ports and Transcontainer, as well as construction, oil and gas, agriculture, and telecom assets. Since March the head of Summa, Kremlin-connected oligarch Ziyavudin Magomedov , and his brother and ex-senator of North Caucasus Republic of Dagestan Magomed Magomedov have been in jail, disturbing the operations of some assets and prompting talk of sales re-distribution of large and lucrative transportation assets. Nahodka Port mostly transports coal, which along with container traffic is one of the fastest growing segments in Russian cargo turnover. The port is also building Server Terminal for coal handling with 20mn tonnes annual capacity.
The shares and accounts of Russia's largest port and stevedore group Novorossiysk Commercial Sea Port ( NCSP ) have been unfrozen by the court, the company said in its financial report for the first quarter of 2018. Previously the shares were arrested and blocked as part of an ongoing criminal investigation into its shareholder Summa Group and jailed Kremlin-connected oligarch Ziyavudin Magomedov, disturbing the operations. NSCP showed consolidated revenues of $274mn, up by 5% year-on-year in the first quarter of 2018, with Ebitda and net profit of $168mn and $111mn, respectively. Reportedly Russian state pipeline operator Transneft, another large shareholder in NSCP, was lobbying to undo the arrest on the accounts to let the port continue normal operations.
The growth in railway cargo volumes decreased slightly in June, to 3.1% y/y, from 3.6% y/y in the previous month.
June also saw turnover slow down to 3.0% y/y, after 4.4% y/y in May.
Grain (32x y/y growth), ferrous metals (19% y/y) and coal (10% y/y) were strong performers, while construction materials (-10% y/y) and cement (-12% y/y) were waiting on volumes. In 6mo18, volumes were up 3.4% y/y, while turnover added 4.5% vs. the previous year. Grain was the largest advancer: 55% y/y. Coal volumes were up 5% y/y. Oil was flat and metals gained 5% y/y.
The lease rates for gondolas have risen again , to RUB 1,700-1,800/day, which exceeds our estimates for 2018, keeping the upside risk for financial forecasts for Globaltrans (Buy, 12-mo TP of $13.30).
88 RUSSIA Country Report August 2018 www.intellinews.com