Combined EBITDA of Ukrzaliznytsia subsidiaries drop 11% in 1H14

The six regional railway monopolies of Ukraine reported their individual financials for 1H14 during July 24-25. Their combined revenue decreased 2% yoy to UAH 23.4 bln, with the biggest decline reported by the subsidiary servicing central and northern Ukraine (-11% yoy). The combined EBITDA of the six regional railways decreased 11% yoy to UAH 4.1 bln, with the biggest decline (-30% yoy) demonstrated by Prydniprovska Railway, a company servicing the industrialized Dnipropetrovsk and Zaporizhia regions, as well as Crimea.



Notably, the subsidiary servicing the two warring regions of Ukraine, Luhansk and Donetsk (the Donetska Railway), performed better than some of its peers in 1H14: its revenue fell just 2% yoy to UAH 4.05 bln, and its EBITDA decreased 19% yoy to UAH 641 mln. In 2Q14, the subsidiary performed expectedly weak: its revenue fell 9% yoy and EBITDA fell 23% yoy.



The 1H14 results imply that combined revenue of six railway monopolies decreased 7% yoy in 2Q14 (to UAH 11.7 bln), while their combined EBITDA fell 17% yoy (to UAH 2.1 bln). The biggest decliners in the quarter was the company servicing central and northern Ukraine (-18% yoy in sales, -42% yoy in EBITDA).



Alexander Paraschiy: The combined financial statistics of the six local railways is a very good approximation of Ukrzaliznytsia’s (RAILUA) financials. For instance, the six entities’ aggregate revenue was just 1.9% higher than UZ’s reported official result for 2013 (and it was 1.4% higher in 2012). The aggregate EBITDA of the six subsidiaries was 1.4% less than UZ’s official result for both 2012 and 2013.



The combined results for 1H14 are supportive of our full-year forecast for Ukrzaliznytsia, with our revenue outlook at UAH 49.5 bln (-3% yoy) and EBITDA estimate at UAH 9.2 bln (-16% yoy). At the same time, should the situation in the easternmost regions stabilize quickly (and there are increasingly more reasons for us to believe so), we might see 2014 financial results surpass our estimates.

Источник: Конкорд Капитал