JSC Russian Railways expects loading growth by 1.7% in 2024

JSC Russian Railways expects loading growth by 1.7% in 2024, to 1,265 million tons, for almost all categories of cargo with the exception of grain, as follows from the company’s draft financial plan. Due to this and the increase in tariffs, the monopoly plans to significantly increase net profit and EBITDA – by approximately 25%. Revenues with an increase in tariffs and freight turnover will grow by 14%, increasing faster than expected expenses (by 10%). At the same time, a noticeable increase in costs is predicted both for fuel and materials, and for ensuring transport security, expenses for which will almost double from 2022 and exceed 75 billion rubles.

The forecast for loading of JSC Russian Railways for 2024 is 1265.4 million tons, which is 1.7% higher than the plan for 2023, follows from the November draft investment program and financial plan of JSC Russian Railways (available from Kommersant). An increase in loading is expected both in the domestic market (by 0.5%, to 817.5 million tons) and in export traffic (by 4% to 447.9 million tons). Freight turnover will increase by 3.4%, to 3.43 trillion ton-kilometers.

Loading of the most bulk cargo, according to the forecast of Russian Railways, should increase. Thus, in 2024 it is planned to transport 2.2% more coal, the increase will be mainly for export (plus 3.9%) in the eastern direction (plus 4.5%). Due to exports to the east, loading of oil cargo will increase by 0.3%. It is expected that the transportation abroad of coal will increase by 3.9%, ferrous metals by 6.4% and ores by 19.8%, as well as cargo in containers by 10.2%. As this year, the main driver of exports will be the eastern direction (an increase of 8.7%), while a slight increase in export loading is expected in the northwest and central-south directions (1.6% and 1.1%, respectively) .

JSC Russian Railways expects a drop in grain loading in 2024, which has been growing rapidly this year. Its transportation, according to the project, will decrease by 2.8% due to the projected reduction in the gross grain harvest (by 9.2%).

Next year, Russian Railways expects to show net profit – it will grow by 26%, to 121.7 billion rubles. The EBITDA forecast is RUB 830.2 billion. and assumes growth of 24%. The credit burden of Russian Railways will increase by 738 billion rubles, and the net debt/EBITDA ratio will increase from 3.3 to 3.5. The financial plan assumes a fairly significant increase in transportation revenues – by 14%, to 2.67 trillion rubles, of which 229.8 billion rubles. will come from revenues from indexation of tariffs for freight transportation.

Let us recall that the increase in tariffs for 2024, this year carried out from December 1, assumes a total indexation of 10.7% – this is a basic indexation of 7.6% plus an increase in the allowance for major repairs from 5% to 7%, as well as 1 more % in the form of a new transport security surcharge.

At the same time, the abolition of reduction coefficients for coal will remain in force (see “Kommersant” on September 25).

Expenses, however, should also increase – by 9.9%, to 2.21 trillion rubles. In particular, fuel costs should increase by 7.7%, electricity costs by 5.6%, and funds are also provided for the indexation of wages under the collective agreement for a total of 59.5 billion rubles. Expenditures on transport security, which increased in 2023 by 31.8%, to 62.2 billion rubles, will increase in 2024 by another 21.5% and reach 75.6 billion rubles. The volume of the investment program, as previously reported by Kommersant, will be 1.27 trillion rubles. with record investments in the expansion of the Eastern test site: 366 billion rubles. against 260.2 billion rubles. this year (see Kommersant, October 19).

JSC Russian Railways declined to comment until the final approval of the draft investment program and financial plan.

The head of Infoline-Analytics, Mikhail Burmistrov, believes that the loading indicators set for 2024 by Russian Railways are feasible and could be even more ambitious given the expansion of the Eastern range. Currently, the growth in loading is constrained by insufficiently fine-tuned dynamic infrastructure loading model (DILM), which has had a particularly negative impact on the transportation of petroleum products. There are no signs of improvement yet, the expert notes. The growth in profit and EBITDA is natural given that some expense items are growing below inflation. However, the expert says, this year’s example shows that spending on transport security should increase, and Russian Railways should put into practice those techniques that have been worked out in the Northern Military District zone, including protection against drones.

Natalya Skorlygina