Globaltrans Investment (GLTR) H1 2024 earnings summary

Executive summary

• Rail freight market in H1 2024 saw freight turnover down 6% and volumes down 3% year-over-year, with further declines in July.

• Company freight rail turnover and transportation volume fell 11% and 9% year-over-year, mainly due to operational challenges and fewer loaded trips per railcar.

• Gondola segment, comprising about 70% of the fleet, experienced a 7% drop in bulk cargo volumes in H1 and 9% in July, with no positive trends expected in the medium term.

• Liquids segment performance improved as more tank cars were brought into operation.

• Operational challenges included infrastructural constraints, increased railcar turnaround time, and a record-high total fleet in the Russian railroad system.

Financial highlights

• Revenue rose to RUB 55.0bn (+5.9% YoY); adjusted revenue up 7.7% to RUB 46.7bn.

• Adjusted EBITDA reached RUB 27.7bn, up 9% year-over-year.

• Net profit was RUB 20.1bn, slightly down from RUB 20.9bn in H1 2023.

• Free cash flow was RUB 18.7bn, up 57% year-over-year.

• Net debt was negative RUB 50.2bn as of June 30, 2024.

Outlook and guidance

• No improvement expected in the gondola segment or bulk cargo volumes in the near or medium term due to ongoing market and operational challenges.

• Investment in new rolling stock remains suspended due to high prices and market uncertainty; significant fleet retirements (approx. 3,500 rail cars/year) anticipated between 2025 and 2029.

• Corporate income tax rate in Russia will increase from 20% to 25% from January 2025.