Key Financial Results
In 2013 the Company’s business activities were carried out in more complicated economic conditions than in 2012.
Considerable deterioration of the macroeconomic situation in the country was recorded, which resulted in significant decline of GDP growth, and, more importantly, an essential decrease in the industrial-production growth was seen in 2013. Forecast of changes in these parameters has been consistently adjusted since September 2012. GDP growth slowed to 1.3% compared with 3.4% in 2012. Industrial-production growth, which determines the volume of rail transport activities, was only 0.4% in 2013 compared with 2.6% in 2012.
Due to changes in macroscenarios, the Company was forced to repeatedly adjust the plan on the transportation dynamics. While the initial loading plan assumed the 3.3% growth compared with 2012 report, due to the circumstances prevailing in the end of the year, the loading reduction in 2013 was 2.8%
Key events in 2013
- The Board of Directors of Russian Railways approved the Group Development Strategy until 2030 and set up its financial resilience model.
- The Company fully implemented its obligations of timely funding for the final stages of works linked to the Olympic facilities in Sochi.
- It was decided to transfer RUB 260 bn from the Federal budget to the charter capital of Russian Railways for development of the Baikal-Amur Mainline and the Trans-Siberian Railway, including investment of the Fund of National Welfare in the preferred shares of Russian Railways to be issued in 2014-2016 at a value of RUB 150 bn.
- The Government made a vital decision that the source of funding for the Company investment programme would be for the first time the issue of infrastructure bonds for the amount of RUB 300 bn in 2013–2015, with a maturity period of 15-30 years.
- A public process and price audit of the railway’s Eastern test range infrastructure development projects was carried out. Its findings were considered at expert and public hearings and were submitted
After assessing the extent of the adverse effects of the economic crisis in December 2012, the company commenced the timely development of preventative anti-crisis measures and maintained stable railway transport operations.
All the parameters of the company operations were repeatedly discussed at the meetings of the Board of Directors of Russian Railways and in the interested federal executive bodies. The loss of revenues of Russian Railways resulting from the original plan was RUB 137.5 billion.
To ensure financial balance in the face of revenue reduction and tax liability increases (rise of insurance payments and cancellation of property tax exemption) and also the review of the forecasts of the Ministry of Economic Development of Russia, the original plan of transportation expenses was adjusted and reduced by RUB 98.8 billion.
Alongside the reduction in expenses dependent on the transportation volumes, the primary measures included: optimisation of process flows, conservation of fixed assets, optimisation of outsourced fleet activities, negotiations with suppliers and contractors to alter their pricing policy, and the introduction of a part-time schedule.
Thus, thanks to continuous work on expense management, and also due to the fulfillment of the shareholder’s order (the Russian Federation) on cutting costs, the growth of the specific transportation cost was only 0.4%, which was significantly lower than the average annual inflation rate in the country as a whole (6.8%). The rate of efficiency growth in 2013 was 104.3%, taking into account the fact that across in the country, labour efficiency grew by 1.5%.
Considering this in the context of the conditions for state regulation of railway cargo transportation rates, the company ensured profitable activities in the year’s results and generated a net profit of RUB 740.4 million. At the same time, it established the sources of funding for an investment budge of RUB 467.2 billion, which is more than twice the volume of depreciation in 2013.
The dynamics of financial results in 2009-2013
|Index||Unit||2009||2010||2011||2012||2013||Actual versus target performance 2013||Changes 2013 versus 2012|
|Total revenues||RUB bn||1,050.2||1,195.1||1,288.3||1,366.0||1,358.6||1,376.6||18.0||101.3||10.6||100.8|
|Revenues from transportation, infrastructure services and locomotives||RUB bn||956.8||1,079.3||1,109.1||1,206.5||1,199.4||1,209.5||10.1||100.8||3.1||100.3|
|Gains from other activities||RUB bn||93.4||115.8||179.2||159.5||159.1||167.0||7.9||105.0||7.5||104.7|
|Total expenses||RUB bn||999.9||1,084.2||1,215.6||1,298.6||1,307.9||1,317.8||9.9||100.8||19.2||101.5|
|Expenses on transportation, infrastructure services and locomotives||RUB bn||913.8||986.4||1,050.8||1,151.5||1,162.6||1,165.9||3.3||100.3||14.4||101.2|
|Revenues from other activities||RUB bn||86.1||97.9||164.7||147.1||145.3||151.9||6.6||104.5||4.8||103.3|
|Total sales profit||RUB bn||50.2||110.9||72.8||67.4||50.6||58.8||8.1||116.1||-8.6||87.2|
|Profit from transportation, infrastructure services and locomotives||RUB bn||43.0||92.9||58.3||54.9||36.8||43.6||6.8||118.5||-11.3||79.4|
|Revenues from other activities||RUB bn||7.2||18.0||14.5||12.5||13.8||15.1||1.3||109.7||2.7||121.5|
|Other profits and losses||RUB bn||10.1||14.9||3.8||-1.3||-33.4||-39.3||-6.0||117.9||-38.1||3,116.0|
|Profits and losses from selling shares of subsidiaries and affiliates||RUB bn||1.0||6.9||66.3||33.9||3.6||1.4||-2.2||37.6||-32.5||4.0|
|Budget funds||RUB bn||76.8||52.2||1.8||23.2||0.4||0.9||0.5||225.6||-22.3||3.8|
|Exchange differences||RUB bn||-4.6||0.9||-6.4||4.5||-22.0||-18.4||3.6||83.6||-22.8||-410.7|
|Changes of reserves and other estimated liabilities||RUB bn||-15.4||-17.3||-51.8||-18.2||4.4||-1.7||-6.1||-38.1||16.5||9.3|
|Revenues from the interest in other entities, including dividends||RUB bn||1.6||2.1||21.3||9.8||22.9||23.0||0.1||100.4||13.2||234.2|
|Credit and loan expenses||RUB bn||-24.3||-20.6||-19.6||-19.3||-24.7||-26.8||-2.0||108.3||-7.5||138.7|
|Pretax profit||RUB bn||60.3||125.9||76.6||66.2||17.3||19.4||2.2||112.6||-46.7||29.4|
|Profit tax and other similar liabilities||RUB bn||45.9||51.1||59.8||52.0||17.1||18.7||1.6||109.3||-33.3||36.0|
|Net profits||RUB bn||14.4||74.8||16.8||14.1||0.1||0.740||0.6||512.1||-13.4||5.2|
|Expenses on investment activities with no capitalised interest (excl. VAT)||RUB bn||265.5||317.4||395.4||480.1||467.5||467.2||-0.2||99.9||-12.8||97.3|
|Governmental support, including||RUB bn||108.6||163.2||119.7||152.7||84.1||87.1||2.9||103.5||-65.7||57.0|
|Subsidies and other compensations from the federal budget, regional budgets and non-budget funds.||RUB bn||80.3||59.6||31.2||51.7||28.0||27.6||-0.5||98.2||-24.1||53.3|
|Contributions into charter capital||RUB bn||28.2||103.6||88.6||101.0||56.0||59.5||3.4||106.1||-41.6||58.9|
|Financial debt (liabilities under credits+leasing) /EBITDA||х||1.4||1.0||1.4||1.6||2.7||2.6||-0.1||96.5||1.1||167.6|
|Net debt (financial debt – balance funds) /EBITDA||х||1.3||0.8||0.8||1.2||2.4||2.3||-0.1||94.2||1.1||199.2|
|Changes in debt (principal amount)||RUB bn||19.8||-23.7||74.7||38.3||174.2||175.4||1.2||100.7||137.1||457.5|
|Net change of debt Portfolio, including exchange differences and accrued interest||RUB bn||29.9||-23.3||79.8||35.7||198.4||196.5||-1.9||99.0||160.8||550.4|
|Loan debt||RUB bn||327.4||304.1||383.9||419.6||618.1||616.1||-1.9||99.7||196.5||146.8|
Equity capital, assets and liabilities (according to the accounting balance-sheet of Russian Railways for 2013)
|Unit||2012||2013||% to 2012|
|Currency of balance sheet||RUB bn||4,330.80||4,577.50||5.7%|
|Fixed assets||RUB bn||4,053.20||4,319.60||6.8%|
|Floating assets||RUB bn||277.6||258||-7.1%|
|Capital and reserves||RUB bn||3,481.80||3,540.30||1.7%|
|Long-term liabilities||RUB bn||427.8||656.7||53.5%|
|Short-term liabilities||RUB bn||421.2||380.5||-9.7%|
|Net asset value||RUB bn||3,488.90||3,547.60||1.7%|