Ukrzaliznytsia posts UAH 1.5 bln profit under local standards in 1H16

Ukrainian railway monopoly Ukrzaliznytsia (UZ, RAILUA) reported on Aug. 4 its first semi-annual financials after its reorganization into a joint stock company. In particular, its net revenue amounted to UAH 31.17 bln, EBITDA was UAH 9.66 bln and net income was UAH 1.54 bln in 1H16. The company’s total debt stood at UAH 38.9 bln as of end-June. It presented its financials under local accounting standards.

When it was still organized as a ministerial subdivision in 1H15, Ukrzaliznytsia reported (under IFRS) combined sales of UAH 28.92 bln, EBITDA of UAH 9.08 bln and a net loss of UAH 4.71 bln.

Alexander Paraschiy: We believe UZ’s results as a new joint stock company are comparable with last year’s combined IFRS-based results. At least, the demonstrated trend that can be derived from these numbers in revenue (+8% yoy) and EBITDA (+6% yoy) is in line with what we were expecting. We continue to expect a significant turnaround in UZ’s EBITDA in 2H16.

We also are anticipating some news from the company on the completion of restructuring negotiations with its banking lenders, as UZ is still in default to some of them. In case its default status won’t change in the coming two weeks, this may trigger a cross-default on RAILUA bonds.