Business news from Ukraine

Ukrzaliznytsia increased cargo transportation by 33.8%

In November 2023, Ukrzaliznytsia (UZ) transported 14 million tons of cargo, up 33.8% over the same period in 2022 and 4% over October 2023, the UZ press service said on Tuesday.

“It is important that, in addition to domestic transportation, exports, which are critically important for our country, have begun to grow. Thanks to the work of the Ukrainian sea corridor, grain exports have also increased,” said Yevhen Lyashchenko, chairman of the board of UZ.

According to UZ, these are record figures since the beginning of the large-scale invasion.

According to UZ, in November 2023, the company transported 7.3 million tons of cargo on domestic routes, which is 19% more than in November 2022. Export traffic increased by 56.2% to 6 million tons, import traffic by 35.4% to 679 thousand tons, and transit traffic by 2.2 times to 65.5 thousand tons.

It is noted that the largest share of the transported cargo is grain – 3 million tons (+13% by November 2022), construction materials – 3 million tons (+61.8%), iron and manganese ore – 3 million tons (+2.5 times), coal – 2 million tons (7.7% less).

At the same time, in November, 2.4 million tons of grain were exported by rail, which is 13% more than in November 2022 and 40.4% more than in October 2023.

The company also reported that grain transportation to seaports amounted to 1.7 mln tons in November, up 1.7 times compared to the previous month. At the same time, transportation via land border crossings decreased by 4.2% to 720 thsd tonnes.


“Ukrzaliznytsya” with USAID support will finalize design of construction of a euro track from Polish state border to Lviv

Ukrzaliznytsia JSC (UZ) with support from the U.S. Agency for International Development (USAID) will develop a feasibility study (FS) of the euro track project that will connect Mostyska station on the Polish border to Sknylyv (a settlement in the suburbs of Lviv), the Ministry of Community Development, Territories and Infrastructure (MCDI) said on Friday.

The corresponding memorandum was signed by Deputy Prime Minister for Restoration Oleksandr Kubrakov, U.S. Ambassador Bridget Brink, from UZ – head of the board Eugene Lyashchenko and board member Vyacheslav Eremin.

It is indicated that further development of the 1435 mm wide section of the track will include its connection to Uzhgorod, Kovel, Chernivtsi, and at a later stage to Kiev and eastern Ukraine.

“The track will be used not only for freight, but also for passenger transportation in the direction of EU countries,” Kubrakov said.

He stressed that one of the important tasks to increase export capacity is to modernize and replace the tracks, and if necessary, to build new ones.

“The signing of the Memorandum with USAID will have a tangible impact on the recovery of the Ukrainian economy and contribute to the European integration processes in general,” the Deputy Prime Minister said.

Earlier, the head of the UZ board, Yevhen Lyashchenko, told the Interfax-Ukraine news agency that the design of the construction of the Euroway from the state border with Poland to Sknyliv will be completed by the end of this year. According to him, the implementation of this project will make it possible to organize communication by euro track from Lviv to Krakow, Prague and Vienna.

As reported, the construction of euro track in the direction Mostyska-Sknyliw was planned to begin in 2020. Also in 2020 the government included this project in the list of priority investment projects until 2023.

The railway station Sknyliw is located in Lviv at a distance of 5.5 km from the Lviv station, 3 km from Lviv airport and 1 km from the bus station.

, , , , , ,

Ukrzaliznytsia has purchased 30 thousand tons of diesel fuel from ExxonMobile

The private oil corporation ExxonMobile has delivered 30,000 tons of diesel fuel by tanker to the port of Klaipeda in Lithuania, from where it will be transported by Ukrzaliznytsia to Ukraine to provide a reserve for the stable passage of the winter season, UZ said on Friday.

“Taking into account the available diesel fuel reserves, Ukrzaliznytsia has actually provided the necessary volume for the stable passage of the winter season,” UZ said in a statement.

It is noted that the contract for the supply of this batch of diesel fuel was signed on November 17, and five days later, the shipment began in the port of Klaipeda.

According to UZ, the price for diesel fuel including delivery, excise and customs clearance is quite favorable for the company and will be approximately UAH 52 thousand per ton or UAH 43-44 per liter.

“The final price will be calculated on Monday, five days after the notification of readiness for shipment according to Platts indices,” UZ said.

It is noted that thanks to the agreement with ExxonMobile, UZ saved UAH 2-3 per 1 liter of diesel fuel, as, according to the consulting agency, its cost in Ukraine in wholesale was UAH 46/l, and in retail – UAH 55/l.

According to Ukrzaliznytsia’s calculations, the company has already saved about UAH 1 billion on diesel by reducing consumption and through direct contracts with producers.

, ,

Financial plan of Ukrzaliznytsia for 2024 approved with loss of UAH 12.6 bln

The financial plan of JSC “Ukrzaliznytsia” (UZ) for 2024 was approved with a projected loss of 12.6 billion UAH, which will be covered by the implementation of the plan to break-even, the press service of UZ reported on the official website of the company on Monday.

“The Cabinet of Ministers approved the financial plan of JSC “Ukrzaliznytsia” for 2024. Thus, planned income in the amount of 103.2 billion UAH, in particular, net income from the sale of products (goods, works, services) in the amount of 98.6 billion UAH”, – said in the message of UZ.

It is indicated that the company’s EBITDA is planned at the level of UAH 11.8 billion. EBITDA profitability index will amount to 12%.

The costs of UZ in 2024 will amount to 115.8 billion UAH. In particular, it is envisaged that the cost of sales will increase by 13%, mainly due to the need to increase employee salaries and electricity tariffs.

Revenue from freight transportation is expected to amount to UAH 80.1 billion, from passenger transportation – UAH 9.3 billion.

The planned volume of payments to the State and local budgets – 24 billion UAH, which is 5% more than in 2023.

“For the third year in a row we approve the main financial document of the company even before the new year. This time also in a record time”, – are quoted in the message the words of the head of the Board of UZ Eugene Lyashchenko.

He stressed that the approved financial plan does not provide for the attraction of funds from the state budget, the priority of which is the financing of the country’s defense capability.

“Our task remains stable provision of passenger and freight transportation in wartime conditions and financing of necessary investments for support and restoration of railway infrastructure at the expense of own and attracted from international financial institutions funds. In addition, the financial plan provides for an increase in salaries of railway workers”, – said Lyashchenko, noting that the current salaries of UZ employees do not correspond to their real contribution to the defense capability and economy of Ukraine.

The head of UZ pointed out that work on the financial plan was started back in the third quarter, when the work of ports was completely blocked.

“We have already developed our proposals for reaching break-even. In particular, given the trend of the last two months of this year, we have made a more optimistic forecast for cargo transportation. Also, we plan to unify tariffs: make them more transparent and bring them to the European model. We continue to work on cost optimization,” – said Lyashchenko.

UZ said that the financial plan for 2024 forecasts losses at the level of 12.6 billion hryvnias. They will be covered by the developed plan to reach break-even.

In addition, it is planned to utilize capital investments in the amount of UAH 38 billion. In particular, these funds will be used to restore the infrastructure damaged by the enemy and develop crossings with EU countries.


Ukrzaliznytsia will receive UAH 11 bln of budget support

Direct budgetary funding for Ukrzaliznytsia (UZ) in 2023 will amount to UAH 5 billion, of which UAH 3.5 billion has already been allocated over 10 months, and the government provides state guarantees for another UAH 6 billion for loans that the company takes out from international financial institutions, the Ministry of Finance of Ukraine has reported.

In particular, according to the Ministry of Finance, it is UAH 3.9 billion from the European Investment Bank (EIB) and UAH 2.1 billion from the European Bank for Reconstruction and Development (EBRD).

It is specified that out of the UAH 3.5 billion already allocated this year, almost UAH 3 billion has been allocated for the purchase of new passenger railcars, including the completion of payment for 100 passenger railcars ordered in 2021 and 44 railcars in 2023.

“The prepayment for the purchase of 44 new passenger cars was made on October 28 this year, including the supply of 9 new reserved seats. These will be the first new second-class cars purchased over the past 15 years and the first Ukrainian-made second-class cars,” Deputy Finance Minister Oleksandr Kava said in a release. He recalled that Russian second-class cars were previously purchased.

According to the Ministry of Finance, work is also underway to implement international projects aimed at restoring railway infrastructure: attracting a loan from the EBRD of up to EUR 200 million under the Emergency Support to Ukrainian Railways Project, a $25 million World Bank grant under the Restoration of Critical Infrastructure and Network Connectivity (RELINC) project, a EUR 37.6 million loan from France, and grant assistance from Switzerland for CHF 14 million.

As reported, this fall UZ signed a contract with Kryukiv Carriage Works (KVSZ, Poltava region) for the manufacture of 44 passenger railcars for UAH 1.951 billion with delivery by December 31, 2025.

By the spring of 2023, KVSZ had completed fulfilling Ukrzaliznytsia’s order for 100 passenger railcars under the contract signed in 2021 for more than UAH 3 billion, but pointed to late payment.

, ,

Ukrzaliznytsia transported 2.5 mln tons of grain cargo in October

In October 2023, Ukrzaliznytsia JSC (UZ) transported 2.5 million tons of grain cargo by rail in all directions, including 1.656 million tons in export traffic, Valery Tkachev, Deputy Director of the Commercial Department, said at a meeting with the agricultural business on Thursday.

According to the report, the share of grain cargo transportation in the total volume was 16.5%. At the same time, the volume of average daily load increased to 75.7 thousand tons, which is 44% higher than in September. The record for grain transportation was set on October 25, when more than 90 thousand tons were loaded.

According to UZ, the top 3 railway stations for grain transportation include Vadul-Siret, which exported 136.6 thousand tons, Yahodyn – 121 thousand tons, Izov – 101 thousand tons.

In October 2023, 927.4 thsd tonnes of grain cargo were transported to seaports. The leaders in terms of grain transshipment were the port of Chornomorsk with 442.5 thsd tonnes, Odesa – 286 thsd tonnes and Izmail – 148.5 thsd tonnes.