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Ukrainian Railway hikes daily freight railcar rental rates

Ukrainian Railway hikes daily freight railcar rental rates

4 July 2018

The freight division of Ukrainian Railway (RAILUA)
announced a hike in freight railcar rental rates as of July 28,
Interfax-Ukraine reported on July 3. According to the announcement, new daily rates
for gondola cars will be UAH 720 (up 11%), grain carriers rates will be UAH 856
(up 9%), tank car rates will be UAH 684 (up 5%) and pellet carrier rates will
be UAH 907 (up 21%).

 

Recall, the last hike in daily railcar rates happened in February after
Ukrainian Railway gained the ability to set rates autonomously, bypassing
approval from regulators. That time, daily rates jumped by up to 2.5x.

 

Alexander Paraschiy: The new
prices will allow Ukrainian Railway to generate additional revenue of about UAH
0.3 bln in 2H18, we estimate, giving it only slightly improved profitability.
The good news here is that the deregulation of railcar rates is working
smoothly, meaning the February revision was not a one-off event. This autonomy
has become an important tool for the company to adjust rates to market
conditions and/or its needs. That said, we remain neutral on RAILUA Eurobonds.

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