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LFCF surpassed our estimate, mainly due to lower income tax. As the Russian operating companies recorded a substantial FX loss, their taxable base decreased, and Global Ports paid only $5.7mn of income tax as a result, versus the average of roughly $44mn per year for the previous five years. We expect this effect to be temporary and anticipate a rise in income tax paid this year.
Global Ports has indicated that container throughput was disappointing in January and February this year. Marine container volumes dropped 9.6% y/y in 2m21, though this was close to the market average in the Far East and Baltic basins, meaning that the group maintained its market share. This was somewhat offset by improved marine bulk throughput, which expanded 37% y/y in 2m21 (due to higher coal, car and ro-ro volumes).
The management was conservative with regard to the outlook for 2021, pointing out on several occasions that visibility is low and forecasting beyond even a couple of months is not a reliable process. The company is currently projecting a low single-digit change in revenues per TEU (in either direction) versus 2H20. This implies a y/y decrease from the average for 2020, while we currently model a slight increase of 2% y/y.
The company did not set out capex guidance, but we expect to remain close to the 2020 level.
We consider the results to be robust, and the pace of deleveraging exceeded our estimate by about $30mn. We still think Global Ports should be able to bring net debt/EBITDA down to the 2.0 threshold in 2022, meaning that dividends should restart in 2023.
The Association of Sea Ports released the February operating results for container sea terminals on 11 March. Global Ports’ Russian segment saw its total container turnover drop 5.2% y/y to 120,400 TEUs after dropping 13.8% y/y in January.
Global Ports’ Russian segment (FCT, Petrolesport, ULCT and VSC) saw its total container turnover drop 5.2% y/y to 120,400 TEUs in February.
Exports were down 5.5% y/y to 60,500 TEUs and imports were down 2.7% y/y to 50,300 TEUs during the month, while transit saw the largest drop of 25.8% y/y to 6,400 TEUs.
ULCT experienced the most significant drop among GLPR’s ports (- 52.5% y/y) while Petrolesport (-19% y/y) and PCT (-6.2% y/y) also reported negative dynamics.
187 RUSSIA Country Report April 2021 www.intellinews.com