Globaltrans’ revenue surged 22 percent in 2012, but profit dipped 2 percent as the Russian rail freight operator sharply increased borrowing to finance acquisitions that boosted its share of the fast-growing domestic cargo market.
The London-listed company’s revenue grew to $2.1 billion from $1.7 billion in 2011, but net income fell to $258 million from $266 million.
Financing costs jumped more than 200 percent to $124.5 million, and net debt swelled to $896.9 million at the end of the year from $258.4 million at the end of 2011.
Traffic rose 25 percent year-on-year, outperforming the Russia rail freight market, which grew just 4 percent.
Globaltrans said its fleet was fully utilized in the first two months of 2013 as traffic jumped 35 percent from the same period in 2012.
The company acquired the rail unit of Russia’s Metalloinvest and its 8,300 railcars for $540 million in April 2012 and bought an additional 10,000 cars during the year to take its total fleet to 65,000 units.
The acquisitions continued into this year with the $335 million purchase of MMK-Trans, which has 3,600 railcars working for its former owner, steelmaker Magnitogorsk Iron & Steel.
Globaltrans said it is generating strong cash flow and “is well positioned to move selectively to consolidate the fragmented market as smaller rail operators are increasingly deprived of access to premium cargo bases as well as being impacted by recent market headwinds.”