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PJSC Mostotrest publishes its financial and operating results for the first half of 2019

29/08/19  

PJSC Mostotrest (or, together with its consolidated subsidiaries, Mostotrest, the Company or the Group) publishes its financial and operating results for the first half of 2019(a).

Key Operating and Financial Results:

  • Backlog(b) of the Group amounted to RUB264.8* billion (-4% to the beginning of the year), with new projects for a total of RUB46.6* billion (c)
  • Revenue fell 34% to RUB57.2 billion year-on-year, driven by decreased construction volumes
  • Gross profit grew 13% to RUB11.1 billion in 1H2019. Gross margin was 19.4%, up from 11.4% for the previous reporting period, mainly due to effective cost control and a decrease in the share of subcontracted volumes(d)
  • EBITDA(e) was RUB7.6 billion, a 9% increase on a like-for-like basis, due to an increase in gross profit. EBITDA margin was 13.2%, up from 8% for the previous reporting period
  • Net profit was up 4.2 times to RUB2.6 billion driven by a decrease in net finance costs
  • Capex totalled RUB2.0 billion.

Mostotrest CEO Vladimir Vlasov comments on the results:
“I am pleased to note that despite a significant decrease in revenue we were able to increase the efficiency of our business in the reporting period. Specifically, we lowered the share of subcontracted volumes(d) and decreased costs of materials and financial costs, which led to an increase in the Company's profit by more than 4 times.

We commissioned several large projects, opening to traffic the km 97 - km 149 section of the M-11 “Moscow - St. Petersburg” Toll Highway and also launching four new stations of the Moscow Metro. At the same time, maintaining our conservative approach to participation in new projects, we expressed interest in only a limited number of large new contracts put up for tenders in the reporting period. Since the beginning of the year, our backlog has slightly decreased by 4%. The largest contract available to the market and added to Mostotrest’s portfolio in the reporting period was a contract for the construction of a section (km 33 - km 84) of the M-1 “Belarus” Highway with a total value of RUB25.8* billion (excluding VAT)".

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a) The press-release has been prepared on the basis of the unaudited consolidated interim condensed financial statements prepared in accordance with the IFRS for the six months ended 30 June 2019, 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 the six months ended 30 June 2019 and 2018.

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) Backlog is not a measure defined by IFRS or RAS. 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, net of 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.

c) Excluding other revenue. Net of VAT.

d) The share of subcontracted volumes is calculated as the ratio of cost of subcontractor services to revenue.

e) EBITDA is defined as net profit from continuing operations net of income tax, net finance costs and depreciation and amortisation. 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

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NOTES TO EDITORS

PJSC Mostotrest is 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 2017 share of the Russian transport infrastructure construction market was 15%.

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