Hello, dear colleagues. We are happy to once again welcome you to our teleconference of the Globaltrans Group. Our today's event is going to be on the Group 2022 annual results. On our call today we have Valery Shpakov, the CEO of the Globaltrans Group, and Alexander Shenets, our CFO. As usual, we're going to start with a presentation of our results, and then we will have a Q&A session. We collected your questions in advance, and we are very grateful to all of those who sent their questions to us. Valery, the floor is yours. Now Valery Shpakov, the CEO, is speaking. Hello colleagues. I'm happy to welcome you to our regular teleconference, our regular meeting as usual. According to our tradition, we are going to make an overview of our results. Now it's a good time to look at our results in 2022, and we will certainly talk about the current situation in the market and answer your questions. Could you please have a look at our presentation, slide five. With regard to this slide, I would like to describe some trends that we could observe in the year 2022 in the freight rail market. First of all, I would like to note that in the year 2022, we could experience the influence of new economic conditions. Overall Russian freight volumes fell 3.7%, but the overall freight rail turnover was virtually unchanged. This was due to the transformation of logistics and the increased share of longer distance routes. Gondola pricing was volatile. The rates recovered from the depressed levels of the first half of 2021. However, in late Q2 2022, we could observe a decline again. Some stabilization, however, could be seen at the end of the year 2022. As for tank cars, here the pricing remains robust. The industry overall experienced quite significant inflationary pressure. For instance, regulated RZD tariffs for the traction of empty rail cars in the course of a year were increased twice, and the total indexation amounted to almost 20%. In such conditions, Globaltrans continued delivering high results and improved operating efficiency. We managed to efficiently refocus or redirect the logistics of our clients, and this delivered a decline of the Empty Run Ratio for gondola cars. It went down to 41% as compared to 44% last year. I must note that our customers are happy and satisfied with the quality of our service and all Service Contracts of our Globaltrans Group are intact and performing. As for our financial performance. Well, I will just briefly outline a few key parameters, but later on our CFO will give you more detail on the financials. In terms of finance, we delivered improvements across all key indicators. For instance, our Adjusted Revenue increased to RUB 81.6 billion. Our Adjusted EBITDA amounted to RUB 49.2 billion. We had a high Free Cash Flow at a level of RUB 14.8 billion. Besides, I should also note that we have quite a low level of the Net Debt to Adjusted EBITDA ratio. It is at level of 0.1 times. In terms of dividends, well, unfortunately in this respect, so far we don't have any change and the payout of dividends remains suspended for a number of reasons. I believe it is important to note that despite the volatility, we were investing a lot in the year 2022. In terms of details on that, I would like to say that our investment was primarily focused on expanding the fleet and acquiring assets. Such investment and expansion CapEx and acquisitions delivered a six-fold increase. Total CapEx of the group, including M&A costs, exceeded RUB 20 billion. At the beginning of this year, 2023, we completed the consolidation of our rail tank business. That was done at the level of a company called BaltTrans Servis, BTS. In the reporting year, 2022, we acquired the outstanding 40% stake in the BTS, and thus we increased our share in the asset to 100%. Later on, through an intergroup purchase, BTS bought out most of the rail tank cars from our lease subsidiary, AS Spacecom, and that subsidiary was sold later on. As a result, we now have two key operating center. That's the New Forwarding Company, which we use to manage our gondola cars. The other operating center is BTS for rail tanks and locomotives. Now let's have a look at slide seven. Here I will give you more detail on the market. On the right-hand side of this slide, you can see some graphs showing the trends in terms of the overall Freight Rail Turnover. As I've already noted, after the strong Q1, freight turnover and volumes in Russian railroads started to go down, and that was primarily caused by some weakening in the bulk cargo segment. Of course, the ongoing transformation of logistics towards the far east of Russia was a supporting factor. This results in a greater share of long distance routes, and this increases demand for the rolling stock, and this supports the overall Freight Rail Turnover. This indicator only went 0.1% down last year, whereas the volumes went 3.7% down. You can see that in the graph at the bottom of this slide seven, in the right-hand bottom corner. In the bulk cargo segment, I must note that volumes went 4.3% down in 2023. This was mostly driven by the 5% decline in railings of coal and 5.7% decline in railings of metallurgical cargoes. In the construction segment, volumes went 3.8% up. As I've already mentioned, throughout almost the whole of the first half of the year, pricing was favorable in this segment. Although in late Q2 some deterioration happened, but closer to the end of the year we could see some stabilization. Now, the oil segment. In the oil segment, we could see stabilization of demand. Overall volumes in the oil and oil product segment went only 0.6% down. Pricing in this segment remained favorable. Let's move on. Slide nine. Here I'm going to give you some detail on our operating results. We quite successfully got adapted to new market conditions in 2022, and we delivered quite significant growth of our operating efficiency. First of all... What caused that? We managed to adjust our logistics, and we delivered an improvement in the Empty Run Ratio for gondola cars to 41%. A year ago, this ratio stood at 44%. Another positive factor that supported our efficiency was the currently approved technology for filling empty gondolas with containers at Russia's Far Eastern seaports. This was another driver that helped us to reduce our Empty Run Ratio. We had and still have loaded trips when our cars are returning from the Far Eastern ports. In the situation that I've described, the overall turnover of the group in 2022 went 8% down. I must note that in the rail tank segment, the Freight Rail Turnover went 7% up. This was caused by transformation of logistics and longer routes. Average pricing across our fleets in 2022 remained good, remained solid. A few words about our relations with clients. As before, this remains one of our key priorities. Our Service Contracts are performing. In 2022, Service Contracts contributed around 59% to Net Revenue from Operation of Rolling Stock. We managed to partially replace the rail cars fleet that's blocked in the territory of Ukraine. We did that by means of leasing fleet and adding newly acquired rail cars. We're also buying some tank cars to replace the leased-in fleet. At this point, I would like to pass the floor to Alexander Shenets, our CFO, and he will give you more details on our financial results and our financial performance. Alexander, the floor is yours. Now Alexander Shenets, Group CFO, is speaking. Thank you. Hello, ladies and gentlemen. Let's have a look at slide 11 now. In that slide you can see the financial results of our group in 2022. The results were good. For instance, you can see that our Adjusted Revenue increased by 40% versus the year 2021. We were managing our costs quite well and that is why our EBITDA went 69% up. At the same time, I must note that the year 2021 was the crisis year. It was a COVID year. I must also note that in the first half of the year 2021. The pricing environment and the market environment was somewhat better than in the second half of the year. If you compare six months on six months, you can see that the revenue of the company in the second half of the year was 10% lower than in the first half of the year. EBITDA was also lower in the second half of the year than in the first half of the year. The market environment remains favorable for the company. In the graph, in the bottom left-hand corner of this slide, you can see that we significantly increased our CapEx in 2022. I'm now talking about total CapEx, including M&A. The overall growth is by 165%. Total CapEx was more than RUB 20 billion. Besides that, despite that, our Free Cash Flow remained at a high level, around RUB 15 billion. At the same time, the level of debt in the company continued going down. Net Debt went down to under RUB 5 billion and the Net Debt to Adjusted EBITDA ratio was 0.1 times. That's a very low level for the company. Slide 12. Here you can find information on our revenue. The key component of our revenue, as usual, is Net Revenue from Operation of Rolling Stock. It increased by 41%. Of course, its key driver was the growth of gondola rates. This was driven by the post-COVID recovery. Revenue from operating and leasing also went quite substantially up. That was mostly associated with the growth of lease rates. However, there was also some increase in the average fleet that we were leasing out. Revenue from operations in the container segment went down to zero because, as you might remember, we sold our subsidiary SyntezRail in October 2021. That's the company that operated on this segment, and now this segment has been deconsolidated from our balance sheet. Revenue from Engaged Fleets, it rose quite substantially. Absolute numbers are not that big. The growth of this kind of revenue was due to the increase in Engaged Fleet operation in the oil products and oil segment. Now slide 13. Here you can find general information on our total operating cash costs. The key cost items are going to be demonstrated in the next slide. In this slide, I would like to emphasize that our total operating cash costs only went 9% up despite the quite substantial pressure related to some individual cost items. I believe that this result is good. I would also like to draw your attention to the growth of operating non-cash costs in the company by 65% year-on-year. Here we have two key drivers. The first one is that we created provisions. Well, we sort of impaired to zero the 3,800 car rail cars blocked in Ukraine. The second driver is the growth of depreciation of the right-of-use assets. This is due to the increase of the leased-in fleet that we leased under long-term lease agreements. Next slide 14. Here, you can find major operating cash cost items. Well, as it's generally known, our major cash cost item is empty run costs. These went 12% up. As I've already mentioned, the regulated RZD tariff demonstrated quite a substantial growth by almost 20% last year. However, there were some factors in place that kind of restrained this inflation cost factors. First of all, that's the decline in our Freight Rail Turnover and the improvement of operation efficiency and a decline in our Empty Run Ratio in the gondola segment. Employee benefit expenses demonstrated quite rapid growth, 23% up. That was due to several factors that came to stage at the same time. First of all, that's the inflation-driven pressure related to salaries and wages. Besides, we could observe a slight increase in the average headcount in the company because we continued the migration from using RZD, Russian Railways' locomotive crews, to our own in-house locomotive crews. Besides, there was also an increase in bonuses that was because we delivered very good financial results. Besides, we successfully completed some M&A deals in 2022. Our repair and maintenance expenses did not grow. They even went 1% down. That's a real achievement, and this is due to... This is due to the fact that we managed to get good pricing in terms of repairs and in terms of some spare parts. Although inflationary driven, inflation-driven pressure still remained with regard to this cost item. Our fuel and spare parts, locomotive expenses went 2% up. This is not big growth, and that was due to some inflation-related processes in terms of the cost of fuels and engine oil. Slide 15 now. Free Cash Flow. What I'd like to draw your attention to here, first of all, please take a look at CapEx again. CapEx increased to over RUB 20 billion in 2022. However, maintenance CapEx did not grow. It even went somewhat down. It decreased by 3% year-on-year. Now if you take a look at the expansion CapEx and investment in M&A deals, well, if you look at that, you will see that the company is expensive in terms of expansion capital. Expenses went up by a factor of six. At the same time, the company had a very good cash flow from operations. That is why our Free Cash Flow, well, it did go somewhat down, but that wasn't a major change. It remained at a good high level of around RUB 15 billion. Slide 16 now. Here you can find information on our debt. I must say that despite quite high amounts of investments, our debt continued going down. Total debt decreased by more than RUB 10 billion. Net Debt to EBITDA stood at 0.1 times as of the year-end. The cost of that debt was pretty low despite the quite substantial volatility in the market. That was first of all thanks to the thanks to the choice of our strategy. We mostly had fixed interest rates on our debt. At the bottom of the slide, you can see the maturity profile of our debt. Well, I don't think I need to make any comments on this. The only thing I would like to say is that cash and cash equivalents as of the year-end, in fact, cover all our repayments that are to take place in the year 2023. Now I'd like to give the floor back to Valery again. Now Valery Shpakov of the CEO is speaking again. Let me continue. Thank you. Now I would like to say a few words about the current situation in the market. As we can see, the ongoing adjustments of the market to the current challenging situation continues. If you look at the first two months of the year, 2023, we can see that Freight Rail Turnover overall in Russia overall increased by 3.5%. However, volumes went 2.4% down over the same period. Currently, pricing in both the gondolas and in the tank car segment remains mostly favorable, now at the beginning of 2023. In the future, volatility is possible, of course. However, visibility still remains low. It's hard to make any forecasts. Well, we continue feeling some inflationary pressure. For instance, since the beginning of this year, the regulated tariffs of Russian Railways for the transportation of empty cars went 10% up. Now as for Globaltrans, we remain a strong and stable and sustainable business with high rating efficiency. All of our Service Contracts are intact and performing. Last year, we generated a high cash flow. We were actively investing in the development of our business, and we were deleveraging the company. Besides, last year, we optimized our business processes by way of consolidating our operating and lease competencies in the oil segment at the BTS. At the level of BTS, BaltTrans Servis. Today, we remain focused on operating efficiency and strict cost control. In terms of dividends, we continue looking into various opportunities that would enable us to overcome the current restrictions related, well, first of all, to the corporate structure and listing. This is not an easy task in these times, and it requires thorough consideration and a balanced approach. We are working on that. In the end, I would like to say that in its history, our business has been through different periods, but our key priorities remain unchanged. That first of all, high efficiency, first-class service quality, and creating quality for our shareholders. We aim to continue following our strategy, which has many times proven to be efficient. That's it. Thank you. Now let us answer your questions. Mikhail Perestyuk, IR continues now. Thank you, Valery and Alexander. Now we are going to have a Q&A session. As I told you at the beginning of our call, this time we collected your questions in advance, so we kind of put them in order. We're going to answer key questions, and if we fail to answer any of your questions, we'll be happy to have a separate call to discuss whichever topic you are interested in. There is a number of really important and asked questions that are asked by almost everyone. These include the question regarding re-domiciliation, corporate migration. The question is, do we have any plans or what opportunities do we consider? Can you give comments of any timelines? Alexander Shenets is speaking now. Thank you. Let me answer this question. It's worth noting that this is a very comprehensive, this is a very complex matter. We should look at it from all angles. Our objective is to find and implement the option that would be most comfortable for all the stakeholders of the company, including the company and its shareholders. We are working on that now. Well, so far I cannot share any details with you, but we are now in a dialogue with various authorities and regulators on this matter. Mikhail continues. Thank you. Thank you. To continue this topic, what prospects are there to resume dividend payouts? Well, Globaltrans has had quite a long history of dividend payouts, and this is certainly very important for the shareholders. Alexander Shenets, the CFO, is speaking now. Well, of course, we have always realized the how important the dividend payouts matter is. Of course, right now, we are thinking a lot about that. Unfortunately, at this point in time, there are certain restrictions in terms of distributing dividends to our holding company in Cyprus. However, we continue working on the possible solutions to this situation. So far, no specific decisions have been made. I don't think I have anything to that, to add. Mikhail continues. Alexander Shenets, to continue this, we have a number of other questions related to this topic. For instance, today the company has low leverage, high cash flow. What plans does the company have with regard to this Free Cash Flow? Should the investors be expecting some potential M&A deals or expansion of the fleet? If you plan to consider some investment, is it going to be about gondolas or rail tank cars or maybe some other segments? Alexander Shenets, the CFO, is answering the question. Well, in this question, you have actually outlined all the potential target areas where we could use our free cash. I would just like to confirm that, first of all, we will continue repaying our current indebtedness to banks and credit institutions. Besides, we will be maintaining a higher liquidity and a high level of cash in the company's accounts, because, well, volatility is in a place, and it would be quite appropriate to have a certain liquidity, a buffer or liquidity cushion. At the same time, you have seen that last year, we invested quite a lot. Our investment increased by a factor of six as compared to the year 2021. This year we are also planning to consider acquiring new and second-hand rail cars, but we will only do that if we can see attractive opportunities and if such investment is in line with our quite strict investment criteria. I think I should also say that we do see prospects in both the gondola cars and tank car segments. In both segments, the market environment is quite attractive now. Yeah. Mikhail says, great, thank you. Now let me continue with the questions. There are quite. We have received quite a lot of questions about the markets, the rates, the logistics. Valery, let me start with the following question. What are the current dynamics of demands for gondolas and tank cars at the beginning of 2023, and what are your expectations for this year? Valery Shpakov, the CEO, is now speaking. Well, I've already said that the market is currently adjusting to new conditions. In terms of example, over the first two months of 2023, our Freight Rail Turnover in Russia increased by 3.5% overall. While volumes went down by 2.4%. In the bulk cargo segment, the decline in volumes was around 2%. In the oil and oil product segment, the volumes went 4% down. As for demand, I would like to note that demand for both gondolas and tank cars is quite stable. Given the current situation of uncertainty, I would prefer to abstain from making any forecast. Our rail cars do enjoy demand, and they are not standing idle on the tracks. Mikhail is now speaking. Valery, in terms of logistics, how have logistics changed, and what changes have been there? Is there any effect or any impact onto your business from the what's called the eastern polygon, the rail railroads and the Far East of Russia being overloaded? Does this produce any impact on you? Valery is answering the question. Well, of course, the logistics have changed quite substantially. I think I ought to note that all the sales markets and well, of course, export markets, they are now mostly in the East. Of course, logistics undergo quite significant changes. Demand for transportation services towards the Far East of Russia is growing. Honestly, there is a certain misbalance between the capacity of railroads and the needs of shippers. It's important to bear it in mind that the continuing redirection of cargo traffic towards the Far East, while this process should accelerate the expansion of throughput capacity on both BAM and Transsib, the major rail lines, and this should deliver growth of freight rail turnover in Russia overall and our company in particular. Our cargo base is differentiated, so we are getting adjusted to the situation as it develops. The implementation of that program in terms of increasing the throughput capacity in the Far East of Russia, it is running at full swing, and they are now also developing plans to further expand the infrastructure, their plan until the year 2030. Mikhail is speaking now. Thank you. Thank you, Valery. What is now happening with regard to your rates in the gondolas and in the tank car segments, and what changes do you see in terms of volumes? Valery Shpakov, the CEO, is now speaking. Well, I think I can answer it like this. We have been working, we are still working in line with market rates, and market rates in both segments remain favorable. Well, of course, there may be some volatility in the future, and I would prefer to abstain from making any predictions or forecasts. Right now we can see quite a high demand for our rolling stock. We are experiencing some shortage of gondolas and tank cars, and we will certainly be considering opportunities to lease or to buy rail cars in this and in the next reporting period. I think we mentioned that with Alexander earlier. In the tank car segment, we can see a positive effect from consolidating our fleet of tank cars now, because now this fleet is concentrated one of our operating companies at BTS, and the efficiency of using that fleet and our ability to manage it is going to improve. Mikhail continues now. Thank you. Great. Questions related to expectations with regard to inflation. Alexander, this question is to you. What is the current situation with the cost inflation? What do you observe or what are your responses to the current situation? What opportunities do you have to restrain the growth, of course? Another question we received is, do you expect a significant increase in the cost of repairs in the year 2023? Alexander Shenets, the CFO, is now speaking. Thank you for this question. It's an important one. Well, unfortunately, I think I should note that costs continue growing. To a certain extent, this is part of the global trends, because inflation is growing all across the world. In terms of our industry and our segment, the costs that grow first are the costs of empty runs. These costs account for more than 50% of total operating cash costs in our company. Well, unfortunately, in the year 2022, we could see two cases of indexation. The total indexation was by 20%. Since the beginning of this year, we've seen indexation by around 10% again, and you can understand that this is quite significant pressure onto our costs. Their repair service prices also go up. They have been increasing since the beginning of the year while at some slower rates of course, but still. As for the spare parts market, it's in some equilibrium, it's balanced, and we do not expect any significant growth in terms of the cost of spare parts. Well, we certainly continue feeling inflationary pressure with regard to such cost items as employee benefit expenses. Still, however, we always view restraining costs, restraining the growth of cost, optimizing costs, as one of our key priorities. We always strive to improve our operating efficiency and reduce empty run ratios. That's why we'll be working on that. We'll keep focused on this year, of course. That's a must for us. Mikhail continues. Thank you. Thank you. To continue this topic of operating efficiency, Valery, now I have a question to you. You substantially improved your operating efficiency in the year 2022. What prospects do you think there are this year, and what was the greatest operating challenge for you last year or this year? Now, Valery Shpakov, the CEO, is speaking. That's an interesting question. That's part of our day-to-day operations, and that's one of our key points to address because there are substantial changes in logistics and the redirection of our cargo flows towards the far east of Russia, among other things. This required quite serious management decisions that would prevent a decline in operating efficiency. I should say that in terms of a number of cargoes, certain cargoes, we can observe a growth of domestic transportation share, and we bear this in mind when we make our plans. As you've seen from our presentation, we managed to successfully adapt our logistics to new challenges, and we substantially reduced Empty Run Ratio for gondolas to 41% in the past reporting year. In this respect, we'll continue being one of the industry leaders. Mikhail continues. Great, thank you. Let us continue on operating efficiency. Valery, next question to you again. Does Globaltrans transport containers and gondolas, and how far does this new opportunity to fill gondolas with the containers and the Far East and ports, how far does it help you to reduce the Empty Run Ratio? Valery Shpakov is now speaking. Yes. We are doing this. We have got quite a differentiated cargo and route base. Of course, this opportunity to load containers into gondolas on return trips, it produces a positive effect onto the efficiency of our transportation to the Far East because we can now take those containers on the way in return trips. This delivers a positive effect in terms of empty runs, empty run ratios, as well. Well, I would like to emphasize it again that operating efficiency remains among our key priorities, and we hope that we will maintain it as high as before. Mikhail is now speaking. Well, thank you. Thank you. in the end, you know, we've received a few questions related to the recent consolidation of the rail tanks segment, rail tanks fleet at BTS, at BaltTrans Servis. The investors would like to understand the logic behind this consolidation of the fleet and what effects do you expect in the future. What effect from these deals you did in 2022 and early 2023, what effect do you expect? Valery Shpakov is now speaking. Yes, we did complete these deals, in fact, we started these efforts of consolidating fleets at individual companies even earlier. Right now, all of our tank cars are consolidated at our 100% subsidiary, BTS. Now we have two operating centers. The first one is in Russian it's called NPK. That's the New Forwarding Company. That's the company managing gondolas. The second operating center is BTS, where we have our tank cars. I believe this is the most efficient decision in terms of managing the fleet and in terms of commercial efforts because this makes the positions of our companies in the market stronger, and they can use their rail cars more efficiently. We certainly expect that the effect from these solutions is going to be positive. Of course, we are not going to give any estimates to you right now. We can see that in principle, this consolidation delivers a certain effect even now. The demand in the tank car segment is quite high. Well, of course, we will need to address quite a lot of tasks here in terms of adjusting our logistics because the fleet has increased. Mikhail continues now. Well, thank you. I think these are all the key questions that we wanted to address during our conference call today. Dear colleagues, we will be happy to continue our dialogue. We have quite a lot of other events ahead that will be running on our results, we'll be making calls with investors. You are welcome to join them. On different platforms, you are welcome to ask your questions, we stay in contact. Once again, many thanks to those who have been participating in our call today and who sent their questions. Thank you very much. Thank you. Have a good working week. Thank you and goodbye.