21 November 2017

OT Logistics’ revenue increased after 3Q by over 22% year-on-year to PLN 640 M thanks to the consolidation of new companies

OT Logistics Capital Group, the biggest port operator in Poland and a leader in inland shipping in Central and Eastern Europe, made consolidated sales revenues of PLN 639.6 M in the first three quarters of 2017. Operating profit was PLN 22.3 M and EBITDA was up 45% year-on-year, reaching PLN 63.1 M. The Group achieved net profit of PLN 12.8 M.

Just in the third quarter the Capital Group made revenue of PLN 206.4 M (up 18% year-on-year) and EBITDA of PLN 29.0 M (+124% year-on-year). Net profit for this period reached PLN 17.1 M. What positively affected revenues in the first three quarters of this year, was the change to the Group’s organisational structure, resulting from earlier acquisitions. Results of the following companies were consolidated: Sealand Logistics, STK (along with its subsidiaries) and Kolej Bałtycka, as well as C.Hartwig Adria and OT Nieruchomości. Since the end of September also financial results of Luka Rijeka d.d., the operator of the Croatian Port of Rijeka, have been consolidated as part of the Group results.

As the organisation extended to new companies, also the revenue structure broken down by segments was changed.  At the end of September OT Logistics Capital Group consisted of 33 companies. The biggest share in the total Group revenue belonged to freight forwarding services: over 55%, shipment and transport services generated 36% revenue and port services 8%. Other activities brought 1% revenue. Due to the increasing value of revenues from rail transport, the transport segment became noticeably more significant in the activity of OT Logistics Capital Group, while the importance of the port segment decreased proportionately comparing to the previous period.

Also the distinct increase in EBITDA year-on-year is connected with the change to the Group’s structure: the consolidation of new companies had a positive impact on EBITDA in the amount of PLN 19.9 M. Furthermore, on the basis of a provisional settlement profit from the occasional purchase of Luka Rijeka shares in the amount of PLN 9.8 M was recognized.

Considering the Group activity in particular segments, the consolidation of new companies led to the improvement of results of the transport activity. In the third quarter revenues in this segment increased by 27%, to PLN 74.3 M. EBITDA in this segment increased by 48% year-on-year, to PLN 12.7 M. Cumulatively, revenues grew to PLN 223.3 M (comparing to PLN 156.3 M a year before) and EBITDA grew to PLN 32.6 M comparing to PLN 21 M.

In the freight forwarding segment, revenue increased by 14% year-on-year, to PLN 112.5 M (cumulatively it grew by 18%, to PLN 354.9 M). EBITDA of this segment remained stable at the level of PLN 5.2 M.

The port segment noted an increase in revenue from external customers. It grew in the third quarter by 6.5%, mainly due to increased transshipment of iron ores at the port of Świnoujście. Still, cumulatively after the first three quarters revenue decreased by 7.7%. EBITDA of the port segment (down to PLN 1.1 M in the third quarter and PLN 9.4 M in the period from January to September) is strongly affected by a weaker economic situation in the agro and cereals market in Europe and in the coal and coke market, combined with a necessity to increase fixed costs. The results are also influenced by investment expenditures (such as new warehouses) and a base effect (particularly good situation in the agro market in 2016). In the next quarters consolidated results of the operator of the port of Rijeka will be visible in the results of this segment.

From January to September Luka Rijeka d.d. increased transshipment volume by 27% to 1.9 M tons, mainly due to servicing coal and ores. The port’s revenues in this period were about HRK 126.6 M (ca. PLN 71 M) and EBITDA – HRK 8.2 M (ca. PLN 4.6 M).

“Consolidation of Luka Rijeka’s results is possible thanks to the increase of our holding in the share capital of the Croatian port operator. Due to the consolidation of new companies, for the first time the assets of OT Logistics Capital Group exceeded PLN 1 B. We consider the Port of Rijeka strategical in terms of development of shipments along the Baltic-Adriatic route, we will aim to increase transshipments in Balkans, utilizing our Polish experiences and relationships with current customers,” Zbigniew Nowik, the President of the Management Board of OT Logistics, says.

On 7 September OT Logistics finalised the additional purchase of almost 12% shares of the Croatian port Luka Rijeka, which means that now OT Logistics holds over 32.56% shares. Furthermore, an agreement was made with other shareholders of Luka Rijeka – pension funds Allianz ZB d.o.o. and ERSTE d.o.o. – enabling the Group to take over operational control over the port. Parties to this agreement now hold in total 56.61% of the port operator’s shares. The Company has announced a tender offer for outstanding shares of the Croatian port.

 

Basic financial data of OT Logistics CG (in PLN million)

 

Data in PLN million 9M 2017 9M 2016 Change
Sales revenue 639.59 523.02 +22.3%
Operating profit (loss) 22.28 16.15 37.9%
EBITDA 63.08 43.53 +44.9%
Net profit (loss) 12.79 2.97 +330.5%
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