OREANDA-NEWS. Novorossiysk Commercial Sea Port Group (“NCSP Group” or the “Group”) (LSE: NCSP, Moscow Exchange: NMTP) today announces its consolidated IFRS financial results for the three months ending 31 March 2014.

NCSP consolidated revenue in Q1 2014 increased 6.7% year-on-year to USD 255.4 million.

Cost of sales did not change materially, SG&A expenses reduced 12.0% year on year.

EBITDA increased 10.4% year-on-year reaching USD 151.7 million.

Commenting on Q1 consolidated financials PJSC NCSP CEO Yuriy Matvienko said:

"In the first quarter of 2014 NCSP Group succeeded in growing its revenue and EBITDA through quality improvements in the cargo mix, increased volumes or certain cargo, partially thanks to the effect of the terminals' re-equipment and operating efficiency boost programs.

Recovery in grain volumes was the key driver for revenue growth contributing USD 15.8 million of extra revenue. Revenue from oil products and container handling increased by USD 2.7 million and USD 2.2 million on the back of volumes growth.

On the other hand, these positive developments were partially mitigated by the USD 10.2 million reduction of crude oil revenues".

Revenue

NCSP Group's consolidated revenue in Q1 2014 increased by USD 16.02 million or 6.7% year on year reaching USD 255.4 million.

Stevedoring revenue increased by USD 16.2 million or 9.0% year on year and reached USD 200.9 million; revenue from additional port services increased by USD 3.1 million, while fleet services revenue reduced by USD 3.5 million; other revenue changed immaterially.

Growth in stevedoring revenue was primarily driven by grain volumes, which increased from 154 thousand tonnes in Q1 2013, when exports ceased due to poor crop and high domestic prices, to 1.5 million tonnes in Q1 2014, causing grain revenue to hike from USD 1.4 million to USD 17.2 million respectively.

Revenue from oil products transshipment increased by USD 2.7 million and revenue from container handling was up USD 2.2 million following increase in volumes by 0.4 million tonnes and 8 thousand TEU respectively.

Revenue from crude oil handling reduced by USD 10.2 million following a 7 million tonnes reduction in volumes.

Mixed movements in volumes of other cargo and services resulted in a USD 1.3 million reduction of stevedoring revenue.

Costs

Group's cost of sales did not change materially in Q1 2014, while SG&A expenses were down by USD 2.2 million or 12.0% year on year. Weakening if the Russian ruble against US dollar positively affect Group's ability to control costs.

EBITDA

Group's EBITDA increased 10.4% year-on-year in Q1 2014 and reached USD 151.7 million. EBITDA increase was mostly driven by growth of stevedoring revenue from quality improvement in the cargo mix, including growing volumes of grain, oil products, and containers, which increased EBITDA by USD 18.2 million. Net change in costs (excluding bunkering) and movements in additional port services and fleet services revenue produced negative effect on EBITDA in the amount of USD 3.8 million.

(Loss)/profit for the period

In Q1 2014 the Group posted net loss of USD 32.2 million.

This is actually a non-monetary loss, resulting from foreign exchange losses accrued on Group's assets and liabilities nominated in foreign currency and revaluated at the exchange rate both at the beginning and at the end of the reporting period in Russian accounts, which is then translated to IFRS accounts. Major amount of FX losses is charged on the USD 1.95 billion loan from Sberbank.

In the reporting period the ruble depreciated against the US dollar from 32.7 as of 31 December 2013 to 35.7 as of 31 March 2014.

Net foreign exchange losses comprised USD 135.9 million.