Business news from Ukraine

STATE-OWNED UKRZALIZNYTSIA INVESTS UAH 8.5 BLN IN FIXED ASSETS DEVELOPMENT IN JAN-AUG 2018

Ukrzaliznytsia has repaired and reconstructed 351 km of track from the planned 1,935 km this year, the company’s press service has reported. In January-August 2018, the company reconstructed almost 184 km of track and overhauled more than 167 km, replaced 106 railroad switches for new sets. In September it is planned to reconstruct 36.1 km of track, overhaul 34 km of track, repair 118.6 km, and renew 55.4 km of track on various directions.
In general, it is planned in 2018 to repair 1,935 km of track and 1,317 sets of railroad switches. “Without an economically fair tariff, there will remain a maximum of 5,000 km out of 20,000 km of track in Ukrzaliznytsia in 10-15 years,” director for economics and finance at Ukrzaliznytsia Andriy Riazantsev said.
In the eight months of 2018, Ukrzaliznytsia invested almost UAH 8.5 billion in the development of its fixed assets, in particular, in modernization of infrastructure, the acquisition and repair of rolling stock.

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CONSTRUCTION MATERIAL MAKERS CONCERNED ABOUT GROWTH OF UKRZALIZNYTSIA FREIGHT TARIFFS

Ukrainian producers of construction materials are concerned about a rise in Ukrzaliznytsia tariffs on freight transportation, the Association of Construction Materials Producers of Ukraine has said.
“In an internal instruction the Infrastructure Ministry has made public its intention to double the tariff for empty freight cars. While tariffs are rising it is impossible to transport construction materials via Lviv Railways… Freights are overcoming a distance of 150 kilometers for six to seven days,” reads the association’s statement.
In turn, Director General of Kovalska Group (based in Kyiv) Serhiy Pylypenko said that failures in Ukrzaliznytsia’s work lead to delays in construction
“Kovalska has to receive over 200 cars of raw materials per day… Due to Ukrzaliznytsia’s awkward management we are forced to delay the supply of construction materials which consequently impacts timely completion of construction activities,” he said.
Pylypenko added that overall costs of services provided by freight transportation companies grew by 60% over eight months in 2018. In particular, Ukrzaliznytsia increased tariffs on freight transportation by its own cars in July.
“In addition, Ukrzaliznytsia virtually does not have multipurpose rolling stock for the transportation of inert materials. Thus producers [of construction materials] have to use other types of cars (for cement, grain, and minerals) and pay extra fees for them in the form of a 20% tariff increase. Moreover, Ukrzaliznytsia’s shortage in locomotives is 130-150 units per day, while freight delivery time is longer by 2-10 days,” Pylypenko complained.

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UKRZALIZNYTSIA SEES 3.8-FOLD RISE IN PROFIT IN H1 2018

Public joint-stock company Ukrzaliznytsia in January-June 2018 saw UAH 468.36 million of net profit, which is 3.82 times more than a year ago, the company has reported in its financial statements on its website.
Pretax profit was UAH 736.598 million, which is 21.35% more than a year ago.
Net sales revenue over the period came to UAH 39.969 billion, and the production cost reached UAH 38.545 billion.
Labor costs in H1 2018 grew by 43.3%, to UAH 16.535 billion.
As reported, referring to the audited consolidated financial statements of Ukrzaliznytsia for 2017, the company saw UAH 114.55 million of net profit compared with UAH 7.322 billion of loss in 2017, while total loss came to UAH 77.24 million compared with UAH 7.43 billion a year ago.

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UKRZALIZNYTSIA BUYS 2,287 FREIGHT CARS IN JAN-AUG

Ukraine’s railways operator Ukrzaliznytsia in January-August 2018 (as of August 23) bought 2,287 freight cars, including 450 from third-party manufacturers, the company’s press service reported citing Finance and Economics Director Andriy Riazantsev.
“Ukrzaliznytsia’s investment in rolling stock upgrades is ahead of the company’s income. This year we have already spent UAH 1.5 billion more in investment than the sum of total deductions from freight transportation tariffs to our investment account,” he said.
In general, since early 2018, Ukrzaliznytsia has already purchased 2,287 freight cars, of which 1,837 wagons built on the company’s own production facilities.
According to Riazantsev, 20% of over 27,000 open-top wagons forming the company’s working rolling stock is high-quality equipment.
At the same time, the company says Ukrzaliznytsia’s rolling stock in the Ukrainian market of transportation by rail accounts for only 40% of the total stock available.
As reported, Ukrzaliznytsia in the six months of 2018 built 1,740 freight cars, or more than 34% of the total number of all built in this period in Ukraine.
In 2017, it bought 2,721 freight cars, including 2,606 built at the company’s own production facilities.

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UKRZALIZNYTSIA BUILDS 1,300 GONDOLA CARS AT OWN PLANTS, BUYS 450 IN 2018 – UKRZALIZNYTSIA HEAD

Public joint-stock company Ukrzaliznytsia since the start of the current year has expanded the fleet of its gondola cars by 1,750, including 1,300 cars built at own plants of Ukrzaliznytsia, acting Board Chairman Yevhen Kravtsov has said.
“We carried out the deregulation of the wagon component of the tariff. We keep promises and increase the fleet of gondola cars. 1,750 cars have already arrived in the regional branches, 50 more gondola cars and a fitting platform are expected at the end of June,” Kravtsov wrote on his Facebook page.
He recalled that this year, in general, Ukrzaliznytsia plans to build 3,600 cars at its own plants.
“In the near future, we will put into operation a fitting platform for the transportation of containers built at the Ukrzaliznytsia’s plant. Earlier we bought them, now we are producing them at our facilities,” Kravtsov said.
In addition, the head of Ukrzaliznytsia said that before the end of the year Paniutynsky car-repair plant plans to start the release of the most popular wagons – grain carriers.
“Design documentation is already being developed, and later we expect the first sample and tests,” he added.
At the same time, Minister of Infrastructure Volodymyr Omelyan said last week at a meeting with the European Business Association (EBA) that he does not support the independent building of the car fleet by Ukrzaliznytsia.
“We must invest in the tracks and locomotives,” the minister said, giving his vision of investment priorities.
In his opinion, private freight carriers should in

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UKRZALIZNYTSIA, GENERAL ELECTRIC TO ANNOUNCE TENDER TO SERVICE LOCOMOTIVES

Public joint-stock company Ukrzaliznytsia and General Electric plan to announce an official tender to service locomotives under the cooperation contract.
According to a posting on the website of the Ukrainian company, acting Board Chairman of Ukrzaliznytsia Yevhen Kravtsov at a meeting with President and CEO General Electric Transportation Rafael Santana on Thursday discussed some urgent issues of cooperation in upgrade and modernization of the locomotive fleet of Ukrzaliznytsia under the partnership contract signed early this year.
Ukrzaliznytsia and General Electric are preparing for the announcement of an official tender to service TE33A Evolution Series locomotives that will be delivered to Ukrzaliznytsia under the cooperation contract, the company said.
Ukrzaliznytsia also said that during the negotiations General Electric presented options for financing of next phases for the successful implementation of the long-term cooperation contract.

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