Russian Railways announces 6 months 2017 results according to IFRS
The consolidated financial statements of Russian Railways and its subsidiaries
("Group") prepared in accordance with International Financial Reporting Standards
comprise the financial results of over 192 of its subsidiaries.
The Group’s total revenues for the first six months of 2017 increased by
4.1% comparing to a year ago and amounted to 1 082 billion rubles (1 040 billion rubles
for the same period of 2016).
Cargo and infrastructure access revenues grew by 10.5 % up to 717 billion rubles
mainly driven by the increase of cargo turnover by 7.0 % under the favorable economic
conditions and by average yield rate growth. Passenger revenues increased by 10.5%
up to 102 billion rubles due to the volume gain of passenger traffic, VAT rate reduction
from 10% down to 0% and thanks to Moscow Central Ring passenger transportation revenue.
Revenues in logistic segment decreased by 13.0% down to 165 billion rubles due
to reduction of ruble equivalent of GEFCO’s revenue comparing to a year ago,
while total revenue of GEFCO in Euro increased by 2% and amounted to 2.262 billion
The Group’s operating costs increased by 0.7% over the reporting period up
to 987 billion rubles. Major drivers of costs’ growth were increase in electricity
expenses given the tariff indexation and increase in fuel costs due to higher freight
volumes and price inflation in oil segment. Increase in labor and social costs was
related to salaries indexation in 2016-2017 and volumes expansion. At the same time
it should be noted that growth of the real wage was just 2.6%, while work productivity
grew by 10.2% for the same period.
The Group’s EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization)
increased by 11.2% compared to the same period last year to 245 billion rubles (220
billion rubles for the first half 2016). EBITDA margin grew up to 25.4% from 24.5%
a year ago due to revenue growth and operating costs optimization aimed at improving
efficiency of the Company’s operations.
The Group’s net profit amounted to 53 billion rubles over the reporting period
compared to 45 billion rubles a year ago determined mainly by stronger operational
The Net Debt to EBITDA ratio was at 2.08x as of 30 June 2017 compared to the corresponding
figure of 1.94x as of 31 December 2016. Relative increase in a Company’s debt
load was caused by credit portfolio expansion in order to finance investment program
and also by growth of foreign currency liabilities in ruble equivalent given the ruble
depreciation to certain hard currencies comparing to the beginning of 2017. At the
same time higher EBITDA during the last 12 months partly compensated increase in liabilities
volumes, while Net Debt to EBITDA is at the acceptable level (not higher than 2,5x).
As of June 30, 2017 JSC "Russian Railways" has already completed the main part of
it borrowings and refinancing planned for 2017.
EBITDA to Net Interest Expenses ratio (including capitalized interest expenses)
amounted to 6.3x over the reporting period comparing to 5.1x a year ago. Ratio’s
positive dynamics is associated with increasing EBITDA and lower interest expenses
thanks to RZD efforts to improve terms of its financing.
The Group’s capital investments over the first six months 2017 totaled to
254 billion rubles comparing to 198 billion rubles over the same period in 2016. RZD
continues implementing its investment projects focused on renewal of locomotives,
ensuring necessary capacity on key routes as well as safety of rail infrastructure
including fulfillment of infrastructure projects under the state transportation development
JSCo Russian Railways was created on October 1st, 2003 pursuant to Decree of the
Russian Government № 585 "On foundation of Open joint Stock Company "Russian railways"
dated 18 September 2003. TheCompanyis 100% owned by the Russian Government.