Under the conditions of the economic recession caused by the pandemic, PJSC TransContainer’s financial situation remains steady and the operating results - quite stable. The President of Delo Group Sergey Shishkarev gave an exclusive interview to RBC TV. “Today we have a budget and stress scenarios. But gladly we do not have to resort to any scenario at the moment. The asset is built into the system of our logistics facilities gradually and correctly. We are working on a strategy and synergetic effect for all the assets of Delo Group”, said the President of the Group.
Speaking about the development of the situation in the global transport market, Mr. Shishkarev noted a drop in global demand for the maritime container transportation, a surplus of the large-capacity fleet and, as a result, price dumping by container lines. The necessary measure of the state subsidies of $900 per TEU for the railway transportation of transit cargo over the Russian territory, proposed by Delo Group’s owner, will allow the country to increase the transit by 200 thousand TEU in 2020.
“We aim to increase transit. TransContainer is the key transport operator from the Far East to Europe and in the opposite direction... A surplus of the fleet and underloading of vessels leads to the price dumping. Rates (of the maritime transportation) are reducing by 50-60%. A simple solution is to subsidize the passage of one container via the territory of the Russian Federation - 900 USD. We do not ask for subsidies either for port transshipment or for transportation by the Russian freight. We ask for a subsidy for transit by rail... We believe that this subsidy will make it possible to increase transit over the territory of the Russian Federation by 200 thousand TEU in the coming year”, said Delo Group’s President.
Sergey Shishkarev also noted that this stimulates a considerable speed increase in the transit of cargo from Asia to Europe and in the opposite direction: “In addition to the price, we have a time factor. If we really achieve the opportunity to transport a container over the Russian territory in 7 days and compared with 45 days of transportation along the Suez Canal or around Europe to the north-western part, then with a competitive rate and time, we will create the prerequisites for increasing the transit”.
Speaking about the situation in the container market, the President of the Group noted that the container transportation suffered less compared to the automobile or air transport, partly because the transshipment of cargo in the port and on the railway is carried out in a non-contact way: “In March, we had a record transshipment rate in our ports. This seems paradoxical, but there is a simple explanation – the March cargo was contracted at the beginning of the year. The pandemic impact is a deferred impact. In May, the decline is increasing. In April, we see a decrease of 2% in the transportation of TransContainer, in May we expect 3%. This is a quite acceptable situation.”
Mr. Shishkarev considers that the main measure to support the port industry in a situation of ruble depreciation and the pandemic is the necessity to subsidize loan rates for investment projects of companies. “We asked for a subsidy for interest rates to service the loans under the investment programs. We invest in rolling stock, expansion of infrastructure, and the construction of berth facilities. If we receive several billion rubles, it will be a great help for us”, said the Head of the Group.
PJSC TransContainer acquired by Delo Group became another focus of the interview. The shareholder said that he was not disappointed with the final purchase price and he was very optimistic about the future, where he saw synergies from the integration of TransContainer into Delo Group. “We clearly understand why we have bought this asset. We believe that we did not overpay for it. We bought it from a fair 6.2 multiplier to EBITDA. There is no disappointment with the overpayment”, said Sergey Shishkarev.
The stable financial and operational status of the container operator is not a reason to relax. Under the pandemic situation, the Company and the Group are considering various options for overcoming the crisis period, reducing costs and preparing reserves. “Today, the situation... is completely under control. We have small reserves ... we are looking for the ways to generate additional income, reduce costs. The work from home in a sense has reduced the cost of administrative staff, who voluntarily agreed to wage reductions.
Today we have a comfortable financial situation, but I do not say that we have overcame the crisis,” Mr. Shishkarev said, making a reservation that it was hard to start and manage such a huge asset under the conditions of the pandemic and the remote work.
At the same time, he said that there was no a single case of the coronavirus spread into the Russian Federation through the Group’s terminals. All Delo Group’s employees are provided with the protective equipment. A constant monitoring of the health status of the employees and the crews is ongoing.
Sergey Shishkarev Interview to RBC TV 27 May 2020