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UPDATE 1-Transcontainer sees Russia market growth slowing
December 18, 2012 / 9:47 AM / 5 years ago

UPDATE 1-Transcontainer sees Russia market growth slowing

MOSCOW, Dec 18 (Reuters) - Russian rail group Transcontainer is expecting demand to grow more slowly next year as the country’s economic growth wanes.

The company, which handles half of all rail container transportation in Russia, expects market growth rates to dip below 10 percent in 2013 from 10.5 percent this year.

“Given the weakening consensus forecast for the Russian GDP growth in 2013 as well as the first signs of slowdown in the Russian rail freight turnover in November 2012, the company’s management expects the rail container market growth rates to turn to the single-digit level in 2013,” it said in a statement.

Transcontainer said it would pursue a “flexible pricing and investment policy” as a result.

Russia’s rail and ports sector is viewed as a high-growth opportunity by investors because of its role in carrying valuable metal and grain exports out of the country.

Russian investment and trading group Summa this month closed a deal to buy transport group Fesco, which controls over 20 percent of Transcontainer, after steel magnate Vladimir Lisin agreed a deal to consolidate 100 percent of Freight One.

On Monday Globaltrans confirmed interest in MMK-Trans, a unit of steelmaker MMK, as NefteTransService agreed to buy Evraztrans from Evraz and said it was seeking more deals.

Oil-to-telecoms conglomerate Sistema has also expressed interest in the sector and has struck a $700 million deal for SG-Trans.

Transcontainer may also eventually be put up for sale as the Russian government has said it wants to further privatise it. It is not yet clear how much will be put on the block or when.

The company on Tuesday reported a 43 percent year-on-year rise in nine-month net profit to 4.27 billion roubles ($137.74 million) on the back of higher revenues and efficiency gains.

Total revenue increased 24.5 percent to 27.4 billion roubles, and earnings before interest, tax, depreciation and amortisation (EBITDA) grew 28.6 percent to 8.2 billion roubles.

State railway monopoly Russian Railways owns more than 50 percent of Transcontainer.

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