OT Logistics Group: over 35 million losses, course sleet action after the bottom

The largest port operator in Poland and one of the European leaders in the inland waterway sector recorded over PLN 35.5 million net losses after three quarters of 2018. Course Stock shares of OT Logistics went to a record low level, and Warsaw Stock Exchange stopped trading in bonds worth PLN 100 million.

In the official communication OT Logistics Group states that after three quarters of this year it recorded PLN 724.3 million of consolidated revenues. This is more than 13 percent more than in the same period the year before. In the period January-September 2017, OT Logistics achieved PLN 639,6 million in revenue.

The situation is even better in the third quarter alone. Only during this period the increase in revenues of the company amounted to 19% year to year. By comparison, growth in the first and second quarters amounted to 3% and 17% respectively.

In a communication to the media, the OT Logistics Group wrote that the positive results are "the effects of the ongoing revival in logistics, which translates into an increase in the number of orders, volumes and rates in almost all product groups, which allowed the OT Logistics Capital Group to make very high use of its handling and transport capabilities, mainly in the field of raw materials handling for steel and energy".

Increase in revenue but large loss

The company stressed that the economic recovery was still visible especially in the freight forwarding sector. The Communication states: "There are increasing rates and margins in shipping containers and metal products. The large increase in port handling is driven by the economic downturn in the coal and steel markets. The general transhipments are also growing".

However, the group has a problem. Although President Zbigniew Nowik, quoted in the Communication, assures that OT Logistics "consistently aims to increase the improvement of operational performance, and the effects of these actions are seen in the third quarter", the company recorded several dozen million net losses after nine months of that year.

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It amounted exactly to PLN 35.6 million. The OT Logistics Group splits the gap from the results achieved in the same period a year before: after nine months of 2017, the company had a net profit of PLN 27.8 million, with a profit of PLN 42.6 million at the end of the year. This result was spectacular because in 2017, the OT Logistics Group increased net profit by more than 400 percent. In 2016, the company earned PLN 8.5 million.

In the meantime, since the beginning of 2018, financial results of the group have gone head-on, neck-on. Already the first quarter of OT Logistics recorded PLN 4.1 million loss (with revenues of PLN 226.7 million), and after the second quarter the loss was already PLN 25.9 million.

OT Logistics: shares of three fifty

Over the past year he also flew down course shares of OT Logistics, listed on the Warsaw Stock Exchange. Last November the shares were valued at PLN 22.90 and last Friday at PLN 3.40. On last Tuesday, the WSE suspended trading of OTS1120 bonds, explaining this "with interest and safety of participants". Until now, the specific decisions of this kind have not been identified by the Exchange or by the company itself, which has only informed that "the case is being clarified".

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However, the President of Zbigniew Nowik, as quoted in the communication, is very strong. "We are in favour of economic prosperity, but we are also taking a number of measures to optimise our business and increase the profitability of the entire organization. To achieve our goals, we have, among other things, undertaken cooperation with a renowned and experienced advisor to help the Group increase operational efficiency," says the President. "I believe that the continuing economic downturn and the increasingly effective activity of companies within the Group will translate into improved results in the following quarters", adds Zbigniew Nowik, quoted in the OT Logistics Communication.

The company's big logistical problem is debt. Therefore, in a recent logistical press release, the group stated that it "worked to refinance its debt in time, serving its existing commitments". OT Logistics reported that in the third quarter she purchased series E bonds worth PLN 10 million and part of series G bonds worth PLN 3.6 million. The company also stated that in early November the bondholders decided to postpone the redemption of the series bonds D worth PLN 100 million. A deadline? By the end of 2020. ‘The conditions for issuing bonds have also been adapted to the arrangements with creditors. The company continues the debt refinancing process, remaining in regular contact with its stakeholders".

Telenovela with loan repayment dates

Only this year, the company has repeatedly postponed the repayment of loans. In a press release dated 14 November, the company wrote: "Similarly to the processes related to bonds, the Group talks with banks that finance it about the changes in the conditions of credit debt, which are intended to allow a comprehensive and targeted refinancing of bank debt".

Meanwhile, on 16 November late in the evening, the company announced that the maturity of the special investment loan granted to OT Logistics by the consortium of banks at a total amount of PLN 50 million, and the deadline for the availability of the credit limit granted to the company by Bank BGŻ BNP Paribas was extended until 7 December by the conclusion of appropriate annexes. The previous date was just November 16.

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According to the "Morning summary consolidated financial statements of the OT LOGISTICS Group for the period of 9 months ended 30.09.2018", short-term liabilities of the group amounted to over PLN 550 million at the end of September and long-term liabilities – over PLN 337. As regards the total financial debt of the OT Logistics Group, at the end of the third quarter it amounted to PLN 427,4 million. The same period a year earlier was PLN 465.9 million.

The OT Logistics Group consists of several dozen companies with a diverse business profile. It is a leading logistics operator, also in the rail forwarding and handling sector in seaports and inland waterway transport. The group has a fleet of about 800 inland vessels and is a leader in inland waterway transport in Poland and Germany. The group has its sea cargo and storage terminals in Świnoujście and Gdynia, as well as an inland port in Wrocław.

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