Volodymyr Zhmak held a conference call with leading investors of the international capital market CEO of JSC “Ukrainian Railways”
Volodymyr Zhmak held a conference call on 21 October with leading investors and analysts of the international capital market. He presented Company’s performance outputs for 6 months of 2020 and told about the main tasks and priorities of the carrier in the future. In total, more than 30 investors took part in the event.
The key event of the first half of 2020 was the pandemic of coronavirus infection (COVID-19) and the consequences felt by economies and the world economy.
Quarantine restrictions significantly affected the level of economic activity of enterprises. Some of the introduced measures had a direct impact on the activities of JSC “Ukrainian Railways”, in particular, all types of railway passenger traffic were temporarily suspended. Despite the suspension of passenger transportation and 15% decrease in revenues from the cargo segment of the business, the Company has made every effort to ensure a continuous cargo transportation process and to support the real sector of the country's economy.
«The Company introduced and is actively implementing measures to optimize business processes and austerity, focusing on critical areas (overhaul of locomotives, freight cars, and electrification of infrastructure); the Company's main costs were prioritized and operating costs were optimized.» - Chairman of JSC “Ukrainian Railways” Volodymyr Zhmak said.
The result of JSC “Ukrainian Railways” affected by the decrease in revenues from freight and passenger transportation by 15% and 56% respectively compared to the first half of 2019. Also, significant fluctuations in exchange rate differences, resulting in a net loss from exchange rate differences of UAH 3.4 billion against a net profit of UAH 1.7 billion in the first half of 2019. According to the results of the first half of 2020, JSC “Ukrainian Railways” received a consolidated net loss of UAH 8.8 billion. The loss was due to the simultaneous impact on the railway sector of a number of negative factors caused by COVID-19 pandemic.
In particular, measures that have been actively taken by the Government of Ukraine and other countries that since March 2020 to prevent the spread of the pandemic caused reduce of demand for freight transportation, passenger traffic suspension and thus decrease in revenues. Management staff of JSC “Ukrainian Railways” continues to develop measures to improve financial performance and to ensure the recovery of the Company from the effects of COVID-19 as soon as possible. These include initiating changes to the tariff system, reducing the land tax burden, in the process of implementation plans to receive additional cash by means of optimization of non-core assets.
The presentation on the outcome of the investor meeting is available at the link.