OVERVIEW

LLP “NMSС “Kazmortransflot” (hereinafter referred to as KNTF) was established by Decree of the Government of the Republic of Kazakhstan No. 1239 as of December 4, 1998. Charter capital of the Company was increased to 45,950 tenge by the Resolution of the General Meeting of Shareholders No. 1 as of February 16, 2004. Temporary financial assistance from JSC NC “KazMunayGas” (hereinafter referred to as JSC NC “KMG”) in the amount of 3,929,375 tenge received under the financial assistance contract No. 98-28 as of April 25, 2007 and No. 140-28 as of June 20, 2007 was restructured to KMTF authorized capital. According to the reports of the Integrated Securities Registrar, the transaction was completed on December 29, 2009. KMTF authorized capital was increased from 45,950 tenge to 3,975,325 tenge. On November 18, 2010, The Agency of the Republic of Kazakhstan on Regulation and Supervision of Financial Market and Financial Organizations replaced KMTF Certificate of Securities Registration. Total amount of shares increased from 3,975,325 to 11,575,721 ordinary shares.

On October 21, 2013, JSC “NMSС “Kazmortransflot” was transformed to LLP “NMSС “Kazmortransflot” (Minutes of the BoD of JSC NC “KazMunayGas” No. 9/2013, Clause 3 as of June 20, 2013).

KMTF is shipping and cabotage national operator and represents the interests of Kazakhstan in the Caspian Sea. Currently, KMTF realizes following activities: sea oil transportation; provision of forwarding services; provision of the fleet facilities services; provision of services of the offshore operations support fleet and office rental.

Sea transportation of oil includes transportation of oil to the Caspian ports of Makhachkala (Russia), Baku (Azerbaijan), Turkmenistan and in the high seas.

The assets structure of KMTF includes:

  • Merchant fleet: own oil tankers: Astana, Almaty и Aktau, each of them has the dead-weight capacity of 12,000 tonnes; Atyrau, Aktobe, Oral with the dead-weight capacity of 13 000 tonnes each. Furthermore, Aframax oil tankers: Alatau and Altai, each of them has the dead-weight capacity of 115,000 tonnes.
  • offshore operations support fleet (OOSF): 12 main tug boats including Yessil, Tobol, Ural, Irtysh; 8 KMG flat-top barges with the dead-weight capacity of 3 600 tonnes each;
  • Future Expansion Project of Tengizchevroil LLP fleet: Barys, Berkut, Sunkar MVC ships and Talas, Emba and Irgiz tugs.

 

Introduction to the Company assets structure

Seq. No. Organization name in the structure of LLP “NMSC “Kazmortransflot” Company share Consolidation included Consolidation method (purchase, proportionate, equity accounting, valuation)
1 Kazmortransflot Ltd 100% Yes Purchase
2 Kazmortransflot UK Ltd 100% Yes Purchase
3 Alatau Shipping ltd 100% Yes Purchase
4 Altai Shipping ltd 100% Yes Purchase

 

 

ACTIVITY ANALYSIS OF THE COMPANY

  1. Operational programme

Consolidate figures

(thousand tonnes)

No. Indicators 2015 2016 2017 2018 Growth rate by year
actual actual actual planned actual
А 1 3 4 5 6 7 8=4/3 9=7/6 10=7/5
1 Total volume of oil transportation, including: 7 033 7 082 6 951 6 631 7 077 101% 107% 102%
1.1 Caspian Sea 2 724 2 875 2 480 2 311 2 738 106% 118% 110%
1.1.1 Aktau-Makhachkala route 1 115 1 611 662 540 1 875 144% 347% 283%
1.1.2 Aktau-Baku route 915 33 234 0 0 4% 0%
1.1.3 Turkmenistan-Baku route 694 1 072 137 1 771 0 155% 0% 0%
1.1.4 Makhachkala (Y. Korchagin)-Baku route 0 159 1 447 0 863 60%
1.2 High seas 4 308 4 206 4 471 4 320 4 339 98% 100% 97%
1.2.1 Black Sea routes 2 175 2 968 3 024 2 880 1 861 136% 65% 62%
1.2.2 Beyond the Black Sea routes 2 133 1 238 1 447 1 440 2 478 58% 172% 171%

 

Oil transportation

Total volume of oil transportation of KMTF for 2018 amounted to 7,077 thousand tonnes of oil or 107% of the plan (6 631 thousand tonnes).

Oil transportation volume of Caspian Sea routes for 2018 amounted to 2 738 thousand tonnes or 118% of the plan (2 311 thousand tonnes). Volume growth of oil transportation occurs due to the provision of additional resources to the consignor Company Belvion Group Ltd on the Makhachkala (Russia) route. In 2018, KMTF operated own Atyrau tanker on this route, as well as chartered Kazakhstani Abai and Kazakhstan tankers.

Oil transportation volume of High seas routes for 2018 amounted to 4 339 thousand tonnes or 100% of the plan (4 320 thousand tonnes). On October 30, 2018, JSC NC “KazMunayGas”, KMG International N.V. and KMTF signed the framework agreement on supply and shipping caused additional cargo shipping from the consignor.

 

  1. Main consolidate financial and economic figures

(million tenge)

No. Indicators 2015 2016 2017 2018 Growth rate by year
actual actual actual Planned Actual
А 1 3 4 5 6 7 8=4/3 9=7/6 10=7/5
1 Revenue, includes: 20 175 23 031 23 832 31 238 44 562 114% 143% 187%
1.1 Operating revenue 19 741 22 457 22 506 31 137 43 092 114% 138% 191%
1.2 Financing revenue 112 344 52 33 46 307% 142% 88%
1.3 Non-operating revenue 322 230 1 274 68 1 424 71% 2088% 112%
2 Expenses, including: 18 403 22 536 23 758 26 786 38 104 122% 142% 160%
2.1 Cost 15 013 17 716 19 642 22 555 29 153 118% 129% 148%
2.2 General and administrative expenses 2 065 2 515 2 291 2 896 3 155 122% 109% 138%
2.3 Selling expenses 80 54 40 65 194 68% 298% 485%
2.4 Financing expenses 1 185 1 502 1 138 1 206 2 134 127% 177% 188%
2.5 Non-operating expenses 60 749 647 64 3 468 1248% 5385% 536%
3 Pretax profit (loss) 1 772 495 74 4 451 6 458 28% 145% 8727%
4 Corporate income tax expenses 512 -1 978 321 1 799 3 515 -386% 195% 1095%
5 Total profit 1 260 2 473 -247 2 652 2 943 196% 111% -1191%
6 Capital investment 2 199 1 188 29 265 11 548 11 934 54% 103% 41%

 

KMTF revenue for 2018 amounted to 44,562 million tenge, which is 143% of the plan. Compared to 187% for the same period last year.

Operating activities revenue of KMTF for 2018 amounted to 43,092 million tenge, which is 138% of the plan. The growth is due to the implementation of the production programme by 107%, as well as an increase in actual tariffs for freight on the high seas. Revenue amounted to 191% compared to the same period last year.

Financing revenue for the reporting period amounted to 46 million tenge or 142% of the plan.

Revenue from non-operating activities for the reporting period of the current year amounted to 1 424 million tenge.

KMTF expenses for 2018 amounted to 38 104 million tenge, which is 142% of the plan. Expenses amounted to 160% compared to the same period.

Operating activities expenses of KMTF for 2018 amounted to 29 153 million tenge or 129% of the plan. The growth was due to the availability of additional resources from shippers on Aktau-Makhachkala route and beyond Black sea routes which led to the fact that the tankers were chartered resulting in additional costs for charter flights and port fees. Accordingly, compared to the same period last year, there is an increase in expenses.

In 2018, General and administrative expenses amounted to 3,155 million tenge or 109%. Expenses amounted to 138% compared to the same period.

Selling expenses amounted to 194 million tenge or 298% of the plan. Broker commission over-expenditure is due to the costs for fleet lease, as well as the search for customers for their own fleet (Altai and Alatau) to provide services for the transportation of oil in the high seas. Compared to the same period last year, expenses amounted to 485%.

Financing expenses amounted to 2,134 million tenge or 177% of the plan. Compared to the same period last year, expenses are 188% due to the increase in the average exchange rate.

Non-operating expenses amounted to KZT 3,468 million.

Total profit for 2018 amounted to 2,943 million tenge or 111% of the plan. Growth caused by the following activities:

1) implementation of the operational programme on Makhachkala (Russia) route and beyond the Black sea routes (according to the Framework agreement);

2) increase in the actual average tariff on the high seas due to changes in World Scale;

3) implementation of the Future Expansion Project of Tengizchevroil LLP for the transportation of modules in the Caspian Sea.

There is also a deferred tax in the amount of KZT 2,192 million in 2018, as a result of the difference between the book value of accounting and the book value of tax accounting

There is also a deferred tax in the amount of KZT 2,192 million in 2018, as a result of the difference between the book value of accounting and the book value of tax accounting.

Capital investments for 2018 amounted to 11 934 million tenge or 103% of the plan.