All news

CEO sees Russian Railways’ 2014 net loss at $2.3 billion

Vladimir Yakunin said that the company has already cut its spending by 84 billion rubles ($2.4 billion) this year
Russian Railways CEO Vladimir Yakunin ITAR-TASS/Alexandra Mudrats
Russian Railways CEO Vladimir Yakunin
© ITAR-TASS/Alexandra Mudrats

SOCHI, June 19. /ITAR-TASS/. Russian Railways will post a net loss of 80 billion rubles ($2.3 billion) in 2014, as the government has prohibited the company to raise cargo prices and has not fully compensated it for the passenger traffic, CEO Vladimir Yakunin told Rossiya 24 TV channel in an interview on Thursday.

“The forecasted loss comprising all elements including slower economic growth amounts to 80 billion rubles,” Yakunin said.

“There was an agreement with the government that … we can get compensation by raising prices for oil exports. But we were advised not to do this reacting to the lobbying abilities of oil firms. Moreover, we are fulfilling our obligations on carrying privileged passengers. We did the transportation, but we received much less money (than promised).”

Yakunin said that the company has already cut its spending by 84 billion rubles ($2.4 billion) this year.

In January-March, the company posted a 10.2 billion ruble ($297 million) net loss against a forecasted 1.7 billion ruble ($49.6 million) net profit calculated under Russian Accounting Standards.

Yakunin also said that the company’s 2015-2016 investment program can be cut if its prices are not increased by 8%.

“[The tariff] is built on a specific base, and if the tariff growth is frozen, then this year’s tariff is lowered to 6%, the inflation rate. If next year’s tariff is capped by inflation, that means that the basis which was taken from us is not restored,” he said.