Russian Railways RAS net profit down by 17% in H1.

By bne IntelliNews August 16, 2011
State-run railroad monopoly Russian Railways (RZD) posted RAS net profit of RUB 48.5bn (USD 1.68bn) in H1, press service of the company announced. This makes a 17% y/y decline. Revenues in the reporting period went up by 10.8% y/y to RUB 644.7bn. Previously RZD announced that it increased cargo loading by 4% y/y in H1 to 607.7mn tones. Passenger turnover went up by 2.8% y/y to 463.9mn people in the reporting period. To remind, in 2010 RZDs cargo turnover went up by 8.8% y/y to 1.21bn tons. As reported previously, should the initiative of PM Vladimir Putin of limiting the growth of natural monopolies to inflation be accepted, Russial Railways will require RUB 45bn-RUB 46bn worth of additional subsidies. This is the difference company would bear if the cargo transportation tariffs are increased by 5%-6% instead of 11.4% initially planned. 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 tariffs 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. Companys 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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