OREANDA-NEWS. August 12, 2011. NCSP posted its operating results for 7M11 today (11 Aug), which we view as negative: compared YoY, cargo turnover was down 2.5% in July.

Liquid cargo, the largest cargo group, slipped into the negative zone, declining 5.0% YoY in July after posting positive results in June (+4.0% YoY). Crude oil shipments fell a significant 9.3% YoY in July (-2.0% YoY in June), while growth in oil product shipments remained impressive at 41.3% YoY (June: 68.4% YoY). We attribute most of this growth to the start of oil product transhipments by Primorsk Port (PTP) in 2011.

For the first time in 2011, bulk cargo leapt into the positive zone with solid 26.2% YoY growth (June: -26.9% YoY). This was linked to the cancellation of the grain export ban on 1 July. All other groups were in line or better than in the previous year. The company guided for 2.5mn tonnes of grain transhipments in 2H11, but if the pace remains the same it could exceed this forecast.

General cargo volumes slumped 20.6% in July, which looks even more disappointing given the poor results in June (down 17.6%). Transhipments of ferrous metals, which contribute most of general cargo turnover, fell 15.2% YoY (June: -14.0%), while an additional negative impact came from timber (-59.1% YoY). We attribute these weak results to low demand for these cargo types from North African countries, where the political situation remains unsettled.

Container traffic (in TEU) rebounded in July after lacklustre results in June (33.7% YoY vs 12.2% YoY in June).

Bottom line

We view NCSP’s results for July 2011 as negative: although grain transhipments resumed, oil transhipment volumes remained volatile and depressed total transhipment volumes. This is not surprising, given the absence of growth in oil extraction reported by Rosstat in 1H11.