Risk management



Economic Risk

  • Risk of reduction in freight volumes/turnover as a result of  weaker economic conditions
  • Maintain flexibility in capex programme
  • Introduce initiatives to improve cost efficiency and labor productivity
  • Fleet diversification to achieve a higher client granularity

Substantial Investment Requirements

  • Relatively high wear of infrastructure and rolling stock
  • Continued investments to refurbish, modernize the infrastructure, locomotive fleet and railcars
  • The Government is expected to continue to provide support to fund strategic infrastructure projects
  • Diversification of funding sources

Staff Costs

  • High personnel costs 
    – sensitivity to staff costs
  • Developed initiatives to optimize the use of labor force
  • Redeployment and re-training to increase labor efficiency

FX  Risk

  • FX currency risk related to business operations and foreign currency denominated liabilities
  • Natural hedge for exporters: UAH weakening is expected to increase the competitiveness of locally produced commodities
  • UZ maintains a portion of FX transit revenue in US$
  • Treasury monitors market risks and sensitivities 

Refinancing Risk & Interest Rates Risk

  • Short-term debt refinancing risk
  • Plans to extend its debt maturity profile (incl. Eurobond)
  • Developed robust funding and refinancing strategy