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Address of the CEO regarding the 10th Anniversary of the Company

Petr Baskakov

Dear colleagues, partners, shareholders and investors,   

This year PJSC TransContainer celebrates its first anniversary – the company is 10 years old. On March 4, 2006 the certificate on registration of the legal entity was received, and on July 1 of the same year the company began economic activity.

The big way was passed during these years:  having started the activity as one of numerous structural divisions of JSC RZD, the company entered 2016 as the indisputable leader of the market of Transportation equipment for shipping cargo via various means of transport. Containers are durable enough for repeated use and can be stacked. Containers are divided into medium-duty (three- and five-tonne), which conform to former Soviet Union standards and are still used for shipments in Russia and the CIS, and ISO (20- and 40-foot) containers, which are used for Russian and international shipments. The universal standard unit TEU (twenty-foot equivalent unit) was introduced to measure transport flow volumes.
Transportation equipment for shipping cargo via various means of transport. Containers are durable enough for repeated use and can be stacked. Containers are divided into medium-duty (three- and five-tonne), which conform to former Soviet Union standards and are still used for shipments in Russia and the CIS, and ISO (20- and 40-foot) containers, which are used for Russian and international shipments. The universal standard unit TEU (twenty-foot equivalent unit) was introduced to measure transport flow volumes.
container
transportations, and not only in Russia, but also at total space of the track 1520. Today PJSC TransContainer has business in 29 countries of the world, the international network of the Company contains 8 foreign representative offices, 3 subsidiaries and 4 joint ventures. In Russia we are presented in all key industrially developed centres and transport hubs: the network of presence of the company contains over 120 offices*.

The important factor of successful development of our Company is the business model put during its creation which is based on possession of key production assets – fitting platforms, containers and terminals – in the scale of the whole network of the Russian Railway that allowed to provide stability of business and to create the uniform, technologically integrated network of delivery of Transportation equipment for shipping cargo via various means of transport. Containers are durable enough for repeated use and can be stacked. Containers are divided into medium-duty (three- and five-tonne), which conform to former Soviet Union standards and are still used for shipments in Russia and the CIS, and ISO (20- and 40-foot) containers, which are used for Russian and international shipments. The universal standard unit TEU (twenty-foot equivalent unit) was introduced to measure transport flow volumes.
Transportation equipment for shipping cargo via various means of transport. Containers are durable enough for repeated use and can be stacked. Containers are divided into medium-duty (three- and five-tonne), which conform to former Soviet Union standards and are still used for shipments in Russia and the CIS, and ISO (20- and 40-foot) containers, which are used for Russian and international shipments. The universal standard unit TEU (twenty-foot equivalent unit) was introduced to measure transport flow volumes.
container
cargoes corresponding to requirements of the most wide range of clients.

In this regard modernization and development of basic assets of the Company from the moment of its creation were among our main priorities. From 2006 the park of Cars for carrying cargo or passengers designated for railway transportation.
Cars for carrying cargo or passengers designated for railway transportation.
rolling stock
of the Company grew by 20% and includes 24,5 thousand fitting platforms, the growth of park of large-capacity containers was almost 60%.  What is even more important, there was a high-quality improvement of structure of assets: 10 years ago we had no 80-foot platforms and only 400 units of 40-foot containers. Now almost a half of capacity of park of rolling stock is presented by high-performance 80-foot platforms, and the number of 40-foot containers is almost nearly 25 thousand units. The average age of carriage park decreased from more than 20 years in 2006 to 15,5 years in 2016. In total during the existence of the Company the volume of investment into updating and development of carriage and Transportation equipment for shipping cargo via various means of transport. Containers are durable enough for repeated use and can be stacked. Containers are divided into medium-duty (three- and five-tonne), which conform to former Soviet Union standards and are still used for shipments in Russia and the CIS, and ISO (20- and 40-foot) containers, which are used for Russian and international shipments. The universal standard unit TEU (twenty-foot equivalent unit) was introduced to measure transport flow volumes.
container
park was 24,2 billion roubles.

By 2016 we almost finished the realization of terminal strategy of the Company: the framework from modern high-performance container terminals at the whole network of the Russian Railway – from Zabaykalsk to Moscow is created. As a result of the carried-out deep modernization we succeeded to reduce significantly the terms of terminal processing of container cargoes, to increase in times the volume of route sendings and to increase the quality of customer service. The total amount of investments into development and modernization of the terminal network of PJSC TransContainer in 10 years was 13,3 billion roubles.

At this strong base we managed to create and develop the essentially new type of service at the network of Russian Railways, - the integrated transport and logistic decisions providing delivery of container cargoes by the principle "from door to door" with use of not only railway, but also, if necessary, other means of transport. In 2006 the share of these services in the revenue amounted to zero, following the results of 2015 they provided more than 60% of profitable inpayments of the Company.

During these 10 years we seek to develop our service according to the needs of our clients and we highly appreciate the trust acquired by years of cooperation.  At the same time, we understand that the trust is the capital which needs to be earned daily. Our task is that with our help the business of the client becomes more and more effective and profitable, and for clients – natural persons, we seek to create the most comfortable conditions of interaction.   Our company became one of pioneers of use of online services in the field of container transportations in Russia:  today it is possible to order "through" container service at more than 42 000 railway directions via our iSales Online store, and we plan to be not satisfied with what has already been achieved.

The essential element of trust to our Company is its strong financial position. In spite of the fact that for 10 years we have passed through two full-scale economic crises, the Company during all this time made profit for the shareholders and regularly paid the dividends. The debt load of PJSC TransContainer is one of the lowest in the transport branch. As a result, the international credit ratings of the Company from the moment of their assignment in 2009 are supported at steadily high level.

PJSC TransContainer is the undisputed leader of the Russian market not only in the sphere of rail container transportation. The company became the first joint-stock company in the Russian railway branch which managed to attract in the capital large foreign investors in the course of the private placement which took place in 2007 and the only issuer who placed shares in the course of the public placement at Moscow and London stock exchanges in the autumn of 2010. Despite the difficult situation at the financial markets, the quotations of our securities are ahead of dynamics of shares of other Russian railway operators and the main share indexes. The Company also became the first Russian the railway A legal entity or individual entrepreneur owning wagons and containers, or possessing them on any other basis, that participates, pursuant to a contract with a carrier, in the carriage process using the aforementioned cars and containers.
A legal entity or individual entrepreneur owning wagons and containers, or possessing them on any other basis, that participates, pursuant to a contract with a carrier, in the carriage process using the aforementioned cars and containers.
operator
who has entered the Russian bond market and has deserved reputation of the reliable borrower among investors.

We realize the responsibility not only to clients, partners and investors, but also to the society, the country where we live and where we work. PJSC TransContainer is among the largest taxpayers of Russia, the programs of nature protection actions are realized in the Company throughout all its existence, we pay much attention to the issues of rendering the charitable assistance, first of all, the help the children who found themselves in a difficult life situation.  We consider it necessary that our Company made the contribution to development and prosperity of our country.

Certainly, all our achievements are, first of all, the merit of staff of our Company.  We aspire to that all workers shared the success of the Company, realized the participation in corporate values and were proud of the fact that they are part of our big and professional team.  For ten years the healthy corporate culture was created in the company which is remarkable by high flexibility, the possibility of mobilization for the sake of high achievements, the involvement and emotional attachment to the cause, aiming at result, the high level of responsibility and mutual respect. Perhaps, it is one of the most significant results of decade of our activity. 

For the first ten years of the work TransContainer has proved the leadership skills more than once.  We are at the big way, and I am sure that this anniversary is the first, but not the last.  Our big team, using the accumulated experience, relying on support of shareholders and partners, trust of our clients, faces the future with confidence.

 

Yours respectfully,

Petr Baskakov 

 

* data are submitted as of December 31, 2015

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