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Tariffs for shipping cargos by Ukrainian rail to be increased by 15 % from May 1

Tariffs for shipping cargos by Ukrainian rail to be increased by 15 % from May 1Tariffs for shipping cargos by rail inside Ukraine will be increased by 15% from May 1, and average annual increase in the tariffs will be 10%. This is in line with the financial plan of public joint-stock company Ukrzaliznytsia approved by the government.

"We had to change the financial plan in part of the tariff increase. Last year we started from 15% plus 15% and this year we will once increase [the tariffs] by 15%. We've reached average annual increase by 10%," acting Board Chairman Yevhen Kravtsov told reporters in Kyiv.

He added that capital investment decreased to around UAH 11 billion in the final financial plan. Earnings before interest, tax, depreciation and amortization (EBITDA) will total UAH 26 billion.

"We haven’t reduced social provisions. Salaries will be increased 5% twice a year. If the economic situation changes, I would suggest the deeper discussion of the issue," he said.

Ukrzaliznytsia CFO Oleksandr Buzhor said that initially larger capital investment and larger expenses on repair were projected.

He said that finally revenue will total UAH 78.4 billion, including UAH 4.139 from the increase of the tariffs. Expenses will amount to UAH 78.326 billion.
Net profit is projected at UAH 96.8 million and taxes and duties will total UAH 11.6 billion.

Read also: Ukrzaliznytsia to raise tariffs for long-distance passenger traffic by 30% in 2016

Capital investment will reach UAH 11.2 billion, including UAH 9.4 billion of own funds and around UAH 1.7 billion of borrowed funds.

"The top priorities are renewal of rolling stock that could cost some UAH 5.6 billion, including UAH 2.61 billion to buy new rolling stock and over UAH 3 billion to modernize it. Modernization of fixed assets will cost slightly over UAH 500 million," Buzhor said.

He said that Ukrzaliznytsia is mulling the attraction of a loan from Germany's KfW bank.

Kravtsov said that potentially Ukrzaliznytsia could buy high-speed trains in 2016, but own funds are not foreseen in the financial plan for this purpose.
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