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NMTP is a dubious idea
I have NCSP's financial statements for the first half of 2024 on my desk today. Let's take a look. Thus, in the first half of 2024, the company's revenue grew by 11.7% to RUB 38.6 billion. The growth rate has fallen by half compared to the growth rate of 22%+ in 2023. Let me remind you that the company's profit has been stagnating for several years. In the first six months of 2024, cargo turnover at the port of Novorossiysk increased by 3.1% to 86.1 million tons, while cargo turnover in Primorsk decreased by 4.6% year-on-year to 32.6 million tons.
In the future, the processing capacity of the Primorsk port is expected to increase further, and the maximum annual oil transshipment volume will reach 57 million tons, an increase of 21%. And in 2025, it is planned to increase the production capacity of Novorossiysk by 40% to 52 million tons. Those. The growth potential of oil will reach about 30% in a few years. This may seem like a lot, but over time, the benefits become blurred.
I have already written about the resistance of the oil industry to the pressure of sanctions and the flow of sales to India. Today, it is possible to maintain the volumes of cargo transshipment through the ports of NMTP. But it should be remembered that today the marine logistics of the port of Novorossiysk is a tasty military target. We must think about such dangers in difficult times!
The company's operating expenses grew by a similar 4.8% year-on-year, and last year's profit turned into a loss of 600 million rubles due to the exchange rate difference, but deposits helped, generating an additional 2.2 billion rubles. Profit grew by 19.5% year-on-year to 21.9 billion rubles from 18.3 billion rubles a year earlier.
The company has 42.6 billion rubles in cash in its accounts, and its total short-term debt is estimated at 9.9 billion rubles. As of June 30, 2024, the declared dividend obligations amounted to 15.4 billion rubles. At the time of writing this review, this money was withdrawn from the company. As a result, having repaid the debt, you will still receive a significant amount of 22.3 billion rubles, and you will not be able to repay the new debt at this rate, but you will be able to keep half of the money in deposits.
The company's valuation has slightly decreased after the current market correction. It has decreased from 13 rubles to the current 8.9 rubles. And the multiples have slightly improved to P/E 5.8, EV/EBITDA 3.4 and P/B 1.2. I would say that this is a fair valuation on paper. Before the correction, the price was a little higher.
The development strategy until 2029 specifies a target of 50% net profit, but the company traditionally pays less. If we take 50% of last year's volume, then we can count on up to 1.12 rubles, or about 12.5% of current production. Given the similar profitability of "blue chips", the idea of NCSP still seems vague.
❗️Not an investment recommendation.
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