| IFRS net profit of Russian Railways (RZD) more than quadrupled y/y to RUB 110.5bn (USD 3.8mn) in H1/10 vs. RUB 25bn seen in H1/09, the company announced. To remind, companys IFRS net profit almost doubled y/y to RUB 152.2bn in 2009. In H1/10 revenues increased by 22% y/y to RUB 651bn, while EBITDA jumped 85% y/y to RUB 205bn. This week Fitch Ratings affirmed long-term Issuers Default Rating (IDR) of Russian Railways at BBB, outlook Stable. Agency attributed the affirmation to full state ownership of the company, its strategic and systemic economic importance, as well as expected government support for the company. As reported, in 2010 overall Russian Railways expected its profit to increase to RUB 70bn. If 2009 profit of RUB 14.4bn is taken as a base, this would make almost a 5-fold y/y growth. However, it was noted that in 2011 net profit is seen to drop to about RUB 2.7bn due to limitations on tariffs' growth (cargo transportation tariff's growth approved by the government for 2011 stands at 8%, while company believes that economically justified growth is 23%). Previously Russian Railways announced that it is going to have state funding cut by 24% to RUB 89bn in 2011. Company's total investment program for 2011 stands at RUB 349bn. State funding for the company in 2011-2013 is going to amount to RUB 157.5bn, including RUB 67bn in 2012 and RUB 0.5bn in 2013. Russian Railways is 100% owned by the government. |
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