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27.08.2019

The management of JSC “Ukrainian railways” managed to improve the financial standing of the company for the last 5 years, – expert evaluation

According to the expert survey, conducted by the Centre for Transportation Strategies, the management of JSC “Ukrainian railways” has substantially improved the Company’s financial standing and achieved profitability.

As stated in the article, in 2015 JSC “Ukrainian railways” was in technical default, and since then it has improved its financial standing, which is now estimated as stable.

The company has a steady increase in revenue and a moderate level of debt load: at the end of 2018, the ratio of the net debt to EBITDA was 2.0 times. “Such indicators make it possible for JSC “Ukrainian railways” to attract another USD 1 billion of debt resources from the market,” – summarizes the Head of CTS-Consulting Andriy Shkliar.

In 2018, the company’s profit amounted to UAH 200 million, and its total revenue almost doubled to UAH 83.4 billion as compared to 2014. Experts also point out that within 5 years JSC “Ukrainian railways” managed to increase the revenues from freight transportation by 72% (+ UAH 28 billion), on the back of decreasing cargo base.

In addition, at the beginning of July 2019 JSC “Ukrainian railways” issued bonds for a period of five years at the annual interest rate of 8.25%, which is 1.5% lower than the coupon of the existing issue. More than 175 investors from the United Kingdom, continental Europe, the United Stated of America and Asia submitted proposals for the acquisition of securities. Therefore, the request was 5 times higher than the company's proposal and reached USD 2.5 billion.

The placement was so successful that the Rating Agency “Standard & Poor’s” (S&P) upgraded the credit rating of the company from “CCS+” to “B-” with the outlook “Stable” (the maximum credit rating, limited by Ukraine’s sovereign rating).