Moody's upgrades Russian Railways outlook to Stable.

By bne IntelliNews January 21, 2010
Moody's Investors Service confirmed Baa1 rating of state-run railroad monopoly Russian Railways (RZD), while upgrading its outlook to Stable from Negative. Agency attributed the upgrade of the outlook to its increased confidence that government support program is compensating for the consequences of the crisis on the railroad industry. Moody's also notes company's successful and timely adjustment to the new market conditions, namely cutting its investment program by 30% to RUB 176bn and cost-cutting measures enabling RZD to save extra RUB 188bn. Company posted net profit of RUB 35.14bn in Jan-Sep 2009, down by 10% y/y. To remind, in H1/09 company suffered a net loss of RUB 13.7bn vs. RAS net profit of RUB 27.3bn in H1/08. In Jan-Sep RZD revenues went down by 7.2% to RUB 778bn. To remind, as announced by PM Vladimir Putin in summer 2009, state support for RZD is going to amount to RUB 50bn in 2010, the same as in 2009. As then commented by the source from RZD, RUB 50bn is a minimum subsidy sufficient for covering companys losses on the transportation tariffs. In 2009 year RZD planned to increase the tariffs by 14.5%, while the actual increase was 8% and next year indexed tariffs will not exceed 9.4%. RAS net profit of RZD in 2008 amounted to RUB 13.4bn vs. net profit of RUB 84.5bn in 2007. Russian Railways is 100% owned by the government.

Related Articles

Russias participation in Cyprus bail-out under question.

As Cyprus is trying to come up with new ways to raise EUR 5.8bn needed to secure the financing from ECB, EC, and IMF, Russia's participation in the package is not clear. According to the latest ... more

Fitch: Russian banks risks in Cyprus limited.

Fitch Ratings believes that resolution of the Cyprus crisis with a deposit levy or some other form of burden sharing involving creditors is unlikely to result in material losses for Russian ... more

Sources: Russia could triple oil exports to China.

Russia and China discuss contracts that would triple exports of Siberian oil through various transport corridors, Reuters reports citing unnamed sources in the industry. Rosneft is discussing ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss