Georgian Railway – has published 1Q19 unaudited financials. In US$ terms revenue remained relatively flat (up 0.6% y/y) at US$ 39.1mn, while in GEL terms the top line increased by 8.0% y/y to GEL 104.2mn in 1Q19 due to GEL’s 7.3% depreciation vs US$. The upswing in freight transportation had lion’s share in total growth.
The share of freight transportation revenue in total increased from 57.1% in 1Q18 to 67.9% in 1Q19. Freight transportation posted a solid 19.6% y/y growth in 1Q19 (+28.4% y/y in GEL terms) one of the highest growth recorded in recent years. Liquid cargo transportation, which made up 39.4% of total freight transportation revenue, was up 5.6% y/y (13.4% in GEL) to US$ 10.5mn. Dry cargo transportation revenue surged 30.9% y/y (40.6% y/y in GEL) to US$ 16.1mn in 1Q19.
Oil products were the only liquid cargo transported by GR, as crude oil transportation volumes were negligible. Oil products transportation was up 9.5% y/y (17.6% y/y) to US$ 9.1mn in 1Q19 fully compensating 10.5% y/y drop in oil products transportation volumes.
Dry cargo transportation revenue surged 30.9% y/y (40.6% y/y in GEL), reaching US$ 16.1mn in 1Q19 as sugar, ores and chemicals transportation increased. Sugar transportation revenue growth was related to increased demand from Azerbaijan generating US$ 1.4mn revenues in 1Q19 vs. US$ 0.7mn in 1Q18. Ores transportation grew 25.4% y/y (34.6% y/y in GEL) to US$ 3.3mn in 1Q19 caused by increased demand from Russia and Jamaica. Chemicals and fertilizers transportation rose 48.0% y/y (58.9% y/y in GEL) to US$ 2.2mn due to increased demand from Turkmenistan. Grain transportation was the only dry cargo that was down almost 3.0x in 1Q19, due to reduced transportation of wheat from Russia.
Passenger traffic remains on upward trajectory, with revenue growing 4.3% y/y (12.0% y/y in GEL) to US$ 1.8mn in 1Q19. On the other hand, freight handling and logistic service revenues declined 38.4% y/y (33.9% y/y in GEL) to US$ 3.1mn and (36.6% y/y in GEL) to US$ 3.7mn, respectively.
Operating expenses, which are mostly GEL denominated decreased 11.2% y/y to US$ 33.5mn (down 4.7% y/y in GEL). Employee benefits, the largest expense category, were down 4.4% y/y to US$ 14.1mn in 1Q19 (in GEL terms it increased 2.7% y/y). Electricity, consumables, and maintenance expenses reached US$ 4.2mn (+11.2% y/y in GEL). Other expense categories decreased also, down 18.9% y/y (-13.0% y/y in GEL) in 1Q19.
The enhancement in both revenues and operating expenses improved adjusted EBITDA, which was up 14.7% y/y to US$ 15.2mn in 1Q19. This translated into improved adjusted EBITDA margin, which came in at 39.0% in 1Q19, compared to 34.2% in 1Q18. Nevertheless net profit came in at US$ 3.0mn in 1Q19, compared to US$ 31.3mn in 1Q18 when the company realized significant FX gain (US$ 31.8mn).
Source - Galt & Taggart
