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Mostotrest PJSC publishes 2018 results

22/04/19  
PJSC Mostotrest (Mostotrest, the Company or, together with its consolidated subsidiaries, the Group) publishes financial and operating results for the year 2018(a).

Key Operating and Financial Results:

  • Market share(b) increased to 15.0% in 2018, compared to 14.6% in 2017
  • Backlog(c) was RUB275.1* billion, having expanded in 2018 with new projects totalling RUB193.3* billion(d), including road repair and maintenance volumes (driven by a number of long-term investment contracts entering the operational stage) totalling RUB90.1* billion(d)
  • Revenue at RUB206.3 billion remained virtually unchanged from the previous year
  • Gross profit declined by 2% from RUB23.6 billion in 2017 to RUB23.2 billion in the reporting year. At 11.2%, gross profit margin remained broadly in line with the previous year, supported by effective cost control
  • EBITDA(e) decreased by 10% to RUB13.5 billion. EBITDA margin was 6.5%
  • Net profit decreased by 43% to RUB1.7 billion, due to an increase in financial expenses
  • Dividends declared and paid out for 9M2017 and the year 2017 totalled RUB3 billion, or 100% of 2017 net profit under IFRS
  • Capital expenditure was RUB4.6 billion, down from RUB6.6 billion in 2017
  • Net debt decreased to RUB6.1 billion from RUB15.8 billion in 2017, mainly driven by an increase in available cash.

Mostotrest CEO Vladimir Vlasov comments on the results:

“The outgoing year was challenging both for the national economy and our industry. Nevertheless, we did everything to meet our commitments and reaffirm our position of leader in transport infrastructure construction. We commissioned the road section of the Kerch Strait Bridge, which, thanks to the dedication and thorough work of our employees was completed half a year ahead of schedule; we completed a number of Moscow-based infrastructure projects; having halved the standard construction time we completed and commissioned the Dubna Bridge; we commissioned a bridge in Serpukhov and opened to traffic two sections of the M-11 Highway. And although 2018 was not awash with new major projects, we successfully participated in tenders in the regions where we are present and have already began construction of a number of new projects.

The volume of tenders held in 2018 decreased by 40% year-on-year to RUB323.8 billion(f). The largest construction projects tendered in 2018 included the new Salaryevo Station – Stolbovo Station section of the Moscow Underground Sokolnicheskaya Line (RUB40.8* billion incl. VAT) and a tunnel under Moscow's Kaluzhskoye Avenue, which includes a split-level traffic interchange at the Stolbovo Hub (RUB27.5* incl. VAT), both of which we won. Overall, the average tender size in road construction continued its downward trend with a 53% decline year-on-year. Therefore, we participated in tenders and won all major contracts that were available in the reporting year, increasing our backlog by a total of RUB193.3* billion. The Service segment was the key driver of the backlog expansion, as several large long-term investment contracts entered the operational stage. Our consolidated 2018 backlog was RUB275.1* billion, a mere 5% decline year-on-year.

As for our financial results, revenue remained virtually unchanged year-on-year. However, there was an increase in financial expenses associated with the large amount of debt we raised to co-finance long-term investment contracts and finance working capital for a number of large projects, due to accelerated rates of construction during the completion stage, which resulted in a decline in the Company's profit indicators.”

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a) The press-release has been prepared on the basis of the consolidated financial statements prepared in accordance with the IFRS as at and for the full year ended 31 December 2018 and 2017, as well as on the basis of the management accounts as at and for the same periods, as this set of financial statements in their entirety provide a comprehensive overview of the Group’s performance for full year ended 31 December 2018 and 2017.

To make the information in the press-release user friendly special notes are used. The information based on management accounts is marked with {*}.

The detailed “basis of presentation” description can be found in the Appendix nr. 2 at the end of the press-release.

b) Calculated as the amount of work performed in-house (revenue net of other revenue and cost of services of third-party subcontractors) in 2018, divided by 2018 market volume (including road repair and maintenance), in accordance with the EMBS Report (an independent consultant providing, among others, information and research on developed and emerging markets).

c) The company’s backlog represents its management’s estimate of the contract value of its projects that remain to be completed as at a particular date, excluding VAT. Such value is calculated as the total contract value for each project that remains to be completed less the amounts already received under the contracts for such projects. The total contract value of a particular project represents the total amount that the relevant entity expects to receive under the contract for such project, assuming the contract is performed in accordance with its terms. A project is included in the backlog of a relevant entity when either a firm letter of commitment is executed by the customer or a letter is received confirming its bid has been successful. Backlog may not be indicative of the relevant entity’s future operating results.

d) Delivered volumes with recognized revenue. Excluding other revenue. Excluding VAT

e) EBITDA is defined as net profit from continuing operations net of income tax, net finance costs and depreciation. EBITDA has limitations as an analytical tool, and one should not consider it in isolation, or as a substitute for analysis of the Group’s operating results as reported under IFRS.

f) Including VAT. Customers: Avtodor, the Federal Roads Agency, Moscow City Construction Department. Company estimates based on information available on the official Russian Federation public procurement information website http://zakupki.gov.ru.
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NOTES TO EDITORS

PJSC Mostotrestis the largest diversified company in the field of infrastructure construction, with a presence across all key and related market segments, and a participant in pioneering public-private partnership projects in Russia. According to the EMBS Group, an independent industry consultancy, Mostotrest’s 2018 share of the Russian transport infrastructure construction market was 15.0%.

The Mostotrest Group key business segments include construction and reconstruction of bridges (including road, railway and city bridges), highways and other transport infrastructure, as well as road repair and maintenance services. In 2012, the Group diversified into a new business segment of road concession management.

The Company was established in 1930 for the construction of special and extra-large bridges.

Currently, Mostotrest is involved in a number of complex integrated transport infrastructure development projects, such as construction of several segments of the M-11 “Moscow – St. Petersburg” Highway, construction and reconstruction of segments of the M-4 “Don” Highway, and construction of the Kerch Strait Bridge.

For more detailed Company information, please visit www.mostotrest.ru