Russian Railways raises RUB 80bn credit line from VTB.

By bne IntelliNews October 20, 2011
As announced by the second largest Russian bank VTB, Russian Railways (RZD) opened a credit line of RUB 80bn (USD 2.59bn) with the bank. The bank noted that the credit line is being opened as part of strategic partnership of VTB and RZD, as well as development of Russia's transport infrastructure overall. As reported, RZD increased cargo loading by 3.3% y/y in Jan-Sep 2011, head of the company Vladimir Yakunin announced without providing the absolute figures. To remind, in H1/11 cargo loading was up by 4% y/y to 607.7mn tons. Overall this year the cargo transshipment growth by RZD is seen at 3%-3.35. In 2010 RZD's cargo turnover went up by 8.8% y/y to 1.21bn tons. 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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