Ukrainian Railways revenue improves 4%, EBITDA jumps 48% in 1H21
Ukrainian Railways (RAILUA) increased net revenue 3.9% yoy to UAH 37.02 bln in 1H21, according to the company’s management report published by marlin.org.ua news site on Sept. 13. Its revenue from freight and passenger transportation increased 1.8% and 26.7% yoy, respectively. The company’s 1H21 EBITDA reached UAH 4.46 bln, which is 48.0% more yoy. Its net loss decreased to UAH 1.41 bln in 1H21, from UAH 8.79 bln a year ago. As compared to the company’s financial plan for 1H21, its revenue under-performed by 5.2%, EBITDA was lower by 36% and net loss was in line.
Ukrainian Railways generated UAH 3.62 bln of cash flow from operations in 1H21 (vs UAH 0.09 bln cash outflow a year ago). The company raised net UAH 0.19 bln from new loans in 1H21 (vs. UAH 2.31 bln net repayment a year ago) while its plan assumed a net raising of UAH 9.94 bln. Its capital expenditures increased 83% yoy to UAH 4.52 bln, but were 56% lower than initially planned.
Its end-June debt was UAH 39.08 bln (down 1.7% yoy) and net debt was UAH 37.27 bln (up 2.9% yoy). This implies its net debt to EBITDA ratio was 3.2x as of end-June, which is a slight decline from what the company reported for end-2020 (3.4x).
Alexander Paraschiy: The leaked results imply that the situation is gradually improving in Ukrainian Railways (its revenue increased 21% yoy and its bottom line turned positive in 2Q21). The company is apparently recovering from the crisis, which makes the creation of a high profile “anti-crisis staff” for the company questionable. The recovery pace is slower than initially planned, meaning its full-year result will be below the plan approved in March. We estimate the company will be able to increase net revenue by 7% yoy to UAH 81 bln and EBITDA by about 35% yoy to UAH 13.7 bln in 2021, which will allow it to improve leverage multipliers. All in all, we remain neutral on RAILUA bonds.