GR released its FY15 financial results. Revenue decreased 12.6% y/y to US$ 253.2mn, mainly due to weak performance in freight traffic. A 28.2% y/y weakening of GEL against US$ in FY15 resulted in a 20.6% y/y decline in operating expenses, which are mostly GEL-denominated, to US$ 170.5mn. As a result, the company was able to largely maintain its adjusted EBITDA, which decreased 1.1% y/y to US$ 142.2mn. Furthermore, the adjusted EBITDA margin widened from 49.6% in FY14 to 56.2% in FY15. FY15 net debt-to-adjusted EBITDA came in at 2.6x, well below the Eurobond covenant of 3.5x.
FY15 revenue decreased 12.6% y/y to US$ 253.2mn, largely due to a 9.1% y/y drop in freight traffic to US$ 232.6mn. Freight car rental and passenger traffic revenues shrank 50.1% y/y to US$ 10.7mn and 34.2% y/y to US$ 6.8mn, respectively.
Operating expenses, which are mostly GEL-denominated, shrank 20.6% y/y to US$ 170.5mn, as a result of local currency depreciation in 2015. Employee benefits expense, down 20.4% y/y, was the largest contributor to the decline.
FY15 adjusted EBITDA decreased 1.1% y/y to US$ 142.2mn. Meanwhile, the adjusted EBITDA margin improved from 49.6% in FY14 to 56.2% in FY15. EBIT reached US$ 96.2mn, up 17.3% y/y. As a result of a significant FX loss, stemming from the GEL depreciation against US$, FY15 net income was negative at US$ 28.9mn. However, the FX loss is an unrealized charge and not a cause for concern.
FY15 operating cash decreased 16.8% y/y to US$ 131.9mn, while capital spending accelerated 40.7% y/y to US$ 69.2mn, largely due to modernization project expenditures. On the financing side, GR paid a dividend of US$ 9.6mn and redeemed the outstanding portion (US$ 27.5mn) of the Eurobond that matured in 2015. FY15 debt was at US$ 517.0mn, while the cash balance was at US$ 123.1mn. Per the Eurobond prospectus, a US$ 18.4mn credit line is added to cash and cash equivalents when calculating the net debt-to-adjusted EBITDA ratio, which came in at 2.6x, below the Eurobond covenant of 3.5x.
