Successful start to the 2019 financial year: Positive first-quarter results for VTG

- Revenue up 18.1% to EUR 301.2 million

- EBITDA up 38.7% to EUR 123.2 million

- Earnings per share up 24.3% to EUR 0.59

- Railcar capacity utilization on a constant high level

- Plans to increase dividend to EUR 0.95

 

A successful start to the 2019 financial year: VTG's results in the first quarter of 2019 reflect a continuation of the positive trend experienced in the prior year. Group revenue of EUR 301.2 million was 18.1% higher than in the same period a year ago (Q1 2018: EUR 255.1 million). EBITDA surged by an even more emphatic 38.7% and stood at EUR 123.2 million for the first quarter of 2019 (Q1 2018: EUR 88.9 million). This development is for approximately 50% attributable to the successful integration of the Nacco fleet. On top of this factor, first-time adoption of the new IFRS 16 accounting standard for operating leases yielded a positive effect of EUR 15.1 million. Earnings per share (EPS) likewise plotted a positive trajectory: At EUR 0.59, this figure was 24.3% up on the comparable figure in the first quarter of 2018 (EUR 0.47).

 

"In the first quarter of 2019, we were able to maintain the successful course witnessed last year. Revenue, EBITDA and EPS all increased further," says Dr. Heiko Fischer, Chairman of the Executive Board of VTG AG. "In line with our planning, VTG is now benefiting from the Nacco takeover, which we closed successfully in 2018. The numbers clearly show that we have charted a decisive course for the future of our company. As announced, we, the Executive Board, will therefore propose to the Annual General Meeting that the dividend be raised to EUR 0.95."

 

Railcar sees growth in revenue and EBITDA thanks to constant, strong fleet capacity utilization and the integration of Nacco

Railcar is continuing to grow and saw revenue increase by 21.0% to EUR 163.4 million in the first quarter (Q1 2018: EUR 135.0 million). EBITDA improved by 31.3% to EUR 116.9 million (Q1 2018: EUR 89.0 million) – a development which above all reflects the integration of Nacco and first-time adoption of the new IFRS 16 accounting standard. Another factor was the consistently high level of fleet capacity utilization, which edged up further from 92.2 percent a year ago to 93.0 percent in the first quarter of 2019.

 

Sales growth at the two logistics divisions

The Rail Logistics Division improved both its revenue and its EBITDA in the first quarter of 2019, in part thanks to new orders in the agricultural produce and petroleum segments. Revenue thus increased by 18.7% from EUR 78.9 million in the first quarter of 2018 to EUR 93.6 million in the quarter under review. At EUR 2.2 million, EBITDA was 5.1% up on the same period a year ago (EUR 2.1 million).

 

Similarly, the Tank Container Logistics Division again increased its revenue compared to the same quarter a year ago: from EUR 41.2 million to EUR 44.2 million, a year-on-year gain of 7.3%. Conversely, its EBITDA fell by 14.4% from EUR 3.2 million to EUR 2.7 million due to changes in overseas freight transportation flows that prompted higher costs.

 

Group revenue and EBITDA expected to increase in 2019

For the 2019 financial year as a whole, the Executive Board of VTG expects positive business development to continue, leading to gains in Group revenue and EBITDA. Although the economy has lately lost some of its momentum, the economic fundamentals in all markets of relevance to VTG remain solid. In Germany, lower track prices in the rail freight segment are expected to inject positive stimulus into the industry. These factors should further boost demand for railcars and logistics solutions. Further revenue and earnings effects are anticipated from the acquisition of Nacco, which will be consolidated for the full year for the first time in 2019. At the same time, transaction and integration costs relating to this transaction should be significantly lower in 2019. In light of these circumstances, the Executive Board expects the 2019 financial year to see revenue increase substantially to between EUR 1.15 billion and EUR 1.25 billion. EBITDA is projected to be between EUR 480 million and EUR 510 million. The EBITDA forecast includes a positive contribution of EUR 50 million due to first-time adoption of the new IFRS 16 accounting standard for operating leases. The Executive Board also remains committed to the target of delivering earnings per share (EPS) of EUR 2.50 for the 2019 financial year.

Share: