Financial overview

Financial results

INDICATOR 2020 2021 YOY CHANGE 2021/2020, %
Revenue, RUB mln 62,168 113,709 83
EBITDA, RUB mln 12,293 47,474 286
EBITDA margin, % 20 42 22 pp
CAPEX 3,103 23,928 671
Revenue, RUB mln
INDICATOR 2020 2021 YOY CHANGE 2021/2020, %
Port Division 16,326 22,746 39
Rail Division 5,340 5,115 (4)
Liner and Logistics Division 46,586 94,591 103
Shipping Division 3,338 4,115 23
Fuel DivisionIn 2021, the Bunkering Division was used as the basis to establish the Fuel Division, which includes Vladportbunker, a company previously recognised as part of the Port Division 841 1,809 115
Eliminations (10,263) (14,667) 43
FESCO Group 62,168 113,709 83

In 2021, the Group’s consolidated revenue increased by 83% to RUB 113,709 million vs RUB 62,168 million in 2020. All business segments except for the Rail Division showed YoY growth of revenue.

In 2021, the Port Division’s revenue went up by 39%, or RUB 6,420 million, to RUB 22,746 million as a result of an increase in turnover of container cargo in all areas: imports (+19%), exports (+5%) and domestic shipments (+14%), as well as on the back of indexation of rates for stevedoring and terminal services, larger volumes of terminal services, freight forwarding and storage, and changes in the cargo structure by general cargo and means of transport.

The Rail Division’s revenue in 2021 dropped by 4%, or RUB 225 million. The reduction in revenue is driven by non-core asset segments, in particular the sale of the grain segment in Q1 2020 and the divestiture of the bulk of the box car fleet, a non-core asset as well, in December 2020. The negative market environment of 2021 also put pressure on rates and volumes of box car transportation, resulting in lower revenue for the segment. In the core segment of fitting platforms, revenue was up by 28% YoY.

The Liner and Logistics Division’s revenue went up by RUB 48,005 million or 103% YoY. The revenue growth was driven by:

  • higher volumes carried by international routes;
  • introduction of surcharges and higher liner tariffs amid lack of container equipment in Asia;
  • increase in intermodal transportation volumes in import shipments;
  • high market rates for import shipments from Asian countries;
  • expansion in the geography of the land route network: import shipments now go through border crossings that are new for FESCO: Altynkol, Dostyk, and Zabaikalsk;
  • higher liner tariffs for domestic container shipping lines.

The Shipping Division’s 2021 revenue added 23%, or RUB 777 million, mostly driven by the operation of the fleet purchased as part of a long-term fleet renewal programme. FESCO Yanina and FESCO Sofia container vessels serve FESCO lines, while the FESCO Olga universal bulk carrier, similar to other vessels of this type, engages in tramp shipments and completed its first voyage with Pet Polymer Trading DMCC as the charterer.

Revenue of the Fuel Division increased by 115%, or RUB 968 million as a result of a recovery across all industries, lifting of COVID-19-related restrictions and a subsequent rise in demand and prices for bunkering oil products. Also, in 2021 the Bunkering Division was used as the basis for the establishment of the Fuel Division, which includes Vladportbunker, a company providing a range of services in oil product handling and storage, from fuel acceptance at tanks to its release to the tanker fleet, or directly from a railcar to a tanker. In 2021, Vladportbunker’s revenue came in at RUB 664 million.

Operating expenses, RUB mln
INDICATOR 2020 2021 YOY CHANGE 2021/2020, %
Port Division 6,857 8,938 30
Rail Division 2,539 2,234 (12)
Liner and Logistics Division 40,278 54,047 34
Shipping Division 1,949 2,414 24
Fuel Division 809 1,665 106
Eliminations (10,289) (14,635) 42
FESCO Group 42,143 54,663 30

In 2021, the Port Division’s operating expenses grew by 30%, or RUB 2,081 million, driven primarily by higher variable expenses as a result of improved cargo turnover (including fuel and energy), as well as an increase in repair and maintenance costs to support and develop port infrastructure to make operating processes more efficient.

The Rail Division’s operating expenses shrank by 12%, or RUB 305 million. This came on the back of the disposal of the non-core fleet of box cars and grain segment, as well as savings in repair costs associated with the said fleet.

Operating expenses of the Liner and Logistics Division grew by 34%, or RUB 13,769 million due to higher transportation volumes, which triggered a rise in expenses associated with railway tariffs, terminal services, and containers.

The Shipping Division’s operating expenses were up by 24%, or RUB 465 million. The growth was mainly attributable to expenses under bareboat charter agreements for the FESCO Yanina and FESCO Olga ships, as well as an increase in other operating expenses due to new fleet acquisitions.

In the Fuel Division, operating expenses increased by 106%, or RUB 855 million in 2021 amid higher prices for bunkering oil products. Also in the reporting year, FESCO’s Fuel Division integrated Vladportbunker, which posted RUB 553 million in operating expenses for 2021.

Gross profit

In 2021, FESCO’s gross profit stood at RUB 59,046 million vs RUB 20,025 million in 2020.

Administrative expenses

The Group’s administrative expenses increased by 60% to RUB 12,470 million vs RUB 7,782 million in 2020. They were driven by salary and other staff related costs as vacancies were filled and new FTEs added to run projects on new routes and serve FESCO’s growing volumes.

INDICATOR 2020 2021 YOY CHANGE 2021/2020, %
Port Division 7,416 11,792 59
Rail Division 1,939 1,991 3
Liner and Logistics Division 3,270 34,967 969
Shipping Division 1,005 1,108 10
Fuel Division 13 82 521
Extra-divisional Group (1,350) (2,466) 83
FESCO Group 12,293 47,474 286
EBITDA margin, %
INDICATOR 2020 2021 YOY CHANGE 2021/2020, %
Port Division 45 52 7
Rail Division 36 39 3
Liner and Logistics Division 7 37 30
Shipping Division 30 27 (3)
Fuel Division 2 5 3
FESCO Group 20 42 22

The Port Division’s EBITDA increased by 59%, or RUB 4,376 million. The key driver was the container market expansion in 2021, which resulted in larger container handling volumes and a rise in turnover for bulk cargoes and various means of transport.

EBITDA of the Rail Division increased by 3%, or RUB 52 million in 2021.

This was primarily due to the expansion of the core fleet of fitting platforms and rise in rates on the back of a shortage of fleet within the Russian Railways’ network, and disposal of the non-core low-margin fleet of box cars, where rates were under pressure from the negative market environment.

The Liner and Logistics Division’s EBITDA increased almost 11-fold or by RUB 31,697 million. Freight rates remained on the rise throughout 2021 due to persisting shortages of capacity and the logistics crisis amid the COVID-19 pandemic. As a result, international routes delivered a much stronger performance than in 2020. The key factors underlying the expansion in intermodal transportation included market growth, launch of new routes, increase in the direct customer base, and FESCO’s positioning in the higher end segment with superior quality.

In 2021, the Shipping Division’s EBITDA went up by RUB 103 million, or 10% YoY. In 2021, FESCO continued its successful cooperation with the National Centre for Polar and Ocean Research of the Ministry of Geography of India.

As part of a programme of shipments to Russia’s northern territories, during the navigation period of 2021, FESCO transported cargoes for the following large customers:

  • KAZ Minerals: delivery of equipment and modular homes for the construction of the Baimsky mining and processing plant;
  • Polymetal: transportation of the Mayskoye deposit’s gold concentrate from Pevek to China;
  • Chukotka Mining and Geological Company (Kinross): delivery of cargoes for the Kupol and Dvoinoye deposits.

The acquisition of FESCO Olga, the Company’s third general cargo ship, helped develop semi-liner services along the Far East–Baltic route and ramp up presence in Russia’s Arctic region, as well as expand projects to engage in shipments along the Northern Sea Route.

The Fuel Division’s EBITDA grew by 521%, or RUB 69 million in 2021, which is due to structural changes in the Division. On a like-for-like basis, the Division’s EBITDA remained flat vs 2020.

Depreciation and amortisation, RUB mln
INDICATOR 2020 2021 YOY CHANGE 2021/2020, %
Port Division 761 868 14
Rail Division 1,112 1,270 14
Liner and Logistics Division 412 704 71
Shipping Division 567 3,868 582
Fuel Division 5
Extra-divisional Group 107 194 81
FESCO Group 2,959 6,909 133

In 2021, the Group’s depreciation and amortisation charges grew by 133% to RUB 6,909 million vs RUB 2,959 million in 2020, mainly driven by upwards revaluation of the vessel fleet and by acquisitions of new vessels, fitting platforms and heavyweight container vessels.

Profit from operating activity
43,420 RUB mln
Profit from operating activity in 2021
8,157 RUB mln
Profit from operating activity in 2020
Other financial expenses
(3,124) RUB mln
Other financial income and expenses (net) in 2021
2,419 RUB mln
Other financial income and expenses (net) in 2020
Net profit
37,850 RUB mln
Net profit in 2021
8,346 RUB mln
Net profit in 2020
Debt obligations, RUB mln
INDICATOR 31.12.2020 EBITDA 31.12.2021 EBITDA
Cash and cash equivalents (4,140) (0.4х) (11,068) (0.2х)
Debt obligations and lease liabilitiesLease liabilities do not include obligations under contracts of lease which was recognised as operating until IFRS 16 came into force on 1 January 2019. So, to calculate ratios, adjusted EBITDA excluding the impact of the IFRS 16 adoption is also used. 33,692 3.2х 34,010 0.7х
Short-term 8,484 3,639
Long-term 25,208 30,371
Net debt 29,552 2.8х 22,942 0.5х

As at 31 December 2021, net debt shrank from RUB 29,552 million to RUB 22,942 million.

Net debt / EBITDA ratio as at 31 December 2021 dropped to 0.5x (excluding IFRS 16 impact).

Capital expenditures

In 2021, the Group’s CAPEX totalled RUB 23,928 million, a more than 7-fold increase vs 2020.

During the year, FESCO added to its asset portfolio three new vessels with a total deadweight of 67.5 thousand tonnes: two container vessels FESCO Yanina and FESCO Sofia, which delivered additional capacity for FESCO’s lines, and FESCO Olga, a universal bulk carrier. The IA ice class of the FESCO Olga vessel meets standards required for operation in freezing seas as the ship is expected to navigate globally, including in the Bering and Chukchi seas, and serve the Northern Sea Route.

In 2021, FESCO Group’s CAPEX associated with fleet acquisitions totalled RUB 6,244 million, including advance payments made under the three vessels that will be added to FESCO’s portfolio in 2022.

In 2021, the container fleet operated by the Company expanded to 109 thousand TEU. CAPEX required to purchase heavyweight containers came in at RUB 5,581 million in the reporting year.

In 2021, the Group continued adding new assets to the fleet of fitting platforms, its core rolling stock asset, in order to accommodate stronger demand for shipments. CAPEX required to purchase fitting platforms amounted to RUB 8,105 million in 2021.

Investments in VMTP’s capacities totalled RUB 1,454 million during the year. The Company continues its port development programme to ramp up its throughput capacity. Investments under the programme are aimed at expanding warehouse facilities for heavyweight containers and adding new assets to the fleet of terminal machinery, cranes, and equipment.

In 2021, FESCO invested RUB 571 million in IT, allocating funds for the development and maintenance of operating and accounting systems.

Other capital expenses were associated with acquiring and repairing wheel sets, dry docking, and inland terminals, along with other maintenance CAPEX.

CAPEX for 2021, %

Source: Company data