RAS revenue of Russian Railways down 11.4% to RUR 230 bln, loss – RUR 26.8 bln in Q1 09
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In January-March 2009, the revenue of Russian Railways under Russian Accounting Standard (RAS) fell by 11.4%, year-on-year, to RUR 230 bln. According to the company, net loss amounted to RUR 26.8 bln. In the first quarter of 2009 the company continued to work in conditions of a recession in industrial activity and, as a consequence, freight traffic volumes were reduced by 27.1% in comparison with the similar period of 2009.
The negative financial results of the 1st quarter are connected with a state policy on insufficient indexation of tariffs, currency rates differences caused by the devaluation of the rouble, and the growth in tariffs for electric power and fuel. Besides, a reduction in cargo transportations and falling passenger traffic (down by 12.3 %) affected the situation," said Olga Gnedkova.
At the moment the program to reduce costs in 2009, which provides for reductions in expenditure of 173.1 billion roubles, has been developed and is working in the company. Among measures to achieve balance in the financial workings of OAO RZD there have been reductions in expenses for consumed production, reduction in volumes of major overhaul of basic means, optimization of administrative and managerial expenses, etc.
According to Olga Gnedkova, the efforts of the company’s management will allow the end of year losses to be reduced, however it will not be possible to achieve parity without the States help on such negative factors as the recession in loading and passenger turnover. According to the forecast, RZD’s revenues for 2009 will be about 1 billion roubles, with a net loss of 49.7 billion roubles.
In 2009 OAO RZD will continue work on re-structuring its credit portfolio to minimise currency loans and reduce short-term credits. For these purposes the company will realize a program to release its infrastructue bonds to a total amount of 100 billion roubles within 5 years. As a result of accommodation on securities, the decision to additionally release 50 billion roubles worth infrastructural bonds will be adopted.
According to OAO RZD’s forecasts, a credit portfolio for 2009 will be 318.8 billion roubles, against 294 billion roubles at the end of 2008. Thus, the debt/EBITDA ratio will be 2.4 which is within the limits of admissible figures.