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Russian Railways post RUB 16 bn loss in Q1

Russian Railways registered loss in the first quarter because of the government’s decision to freeze freight rates, company chief Vladimir Yakunin declared. Yakunin even described the 16-billion-ruble ($440 million) loss as the first one in the state company’s history, although the company previously appeared to report quarterly losses, too.

In the rates controversy, the government has ruled to hold off on the annual raising of various rates for monopoly services like railway transportation and electricity transmission for this year. The decision triggered reports from multiple state-controlled companies last fall that they would either be losing money or have to trim their investment.

Yakunin especially fumed that the rate freeze was so sweeping it even cut some slack for rich oil companies. Rosneft, he said, expected to increase its profit significantly this year, compared to 550 billion rubles it hauled in last year.

Yakunin also declared to the local press that passenger exchange with Ukraine had decreased 30 percent, attributing it to the “political situation.” He did not give the time frame, but bilateral relations plunged to their lowest after Russia annexed Ukraine’s peninsula of Crimea in the middle of last month.

The traffic increased almost 7 percent, but the amount of cargo remained unchanged, compared to the same period last year, the company said in a statement. Adding to the rail operator’s financial woes, Russia’s defense and law enforcement customers ran up unpaid bills worth 4.2 billion rubles last year, Yakunin said.

 Source* Moscow Times

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