OREANDA-NEWS. October 12, 2009. The Russian Railways (RZD) Group increased its revenue under International Financial Reporting Standards (IFRS) in 2008 by 18.3% from the 2007 level, to 1.202670 trillion rubles. Revenue from freight transportation totalled 887.270 billion rubles (up 15.4%), and from passenger transportation 162.312 billion rubles (up 15.2%), reported the press-centre of RZD.

Operational expenses totalled 1.88765 trillion rubles (up 33% from 2007), including salaries and social and social expenditure at 518.674 billion rubles (up 43.7%), purchase of materials, renovations, and servicing of fixed assets at 217.780 billion rubles (up 16.3%), fuel at 70.771 billion rubles (up 42.8%), and electricity at 66.586 billion rubles (up 18%).

The group’s pre-tax profit was 125.81 billion rubles (down 42%), EBITDA was 218.778 billion rubles, and net profit was 76.420 billion rubles (down 47%). RZD paid 48.661 billion rubles in taxes in 2008. Commenting on the financial results, RZD Senior Vice President Vadim Mikhailov said: "During 2008, RZD experienced stable growth in income in the main areas of its operations. The company steadily improved the efficiency of operational processes.

However, obligations taken on during 2007 to index employee salaries, and the provision of social support to railway workers, significantly increased outlays on personnel. In addition, the growth in fuel prices at the end of 2008 had an impact on operational expenditure. As a result, the group’s net profit declined from the 2007 level. This is also due to the reduction in cargo transportation during the fourth quarter of 2008, which caused a contraction in income, and the negative revaluation of the company’s foreign currency-denominated debt due to the devaluation of the ruble." RZD’s revenue in 2008 according to Russian Accounting Standards totalled 1.1017 trillion rubles (up 12.9% from 2007), and net profit was 13.4 billion rubles.
 
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Russian Railways will prepare its accounts under International Financial Reporting Standards (IFRS) on a biannual basis, RZD Senior Vice President Vadim Mikhailov has said. He said this practice is in line with global standards for large corporations, and improves investment appeal and the transparency of RZD’s activities. Results under IFRS for the first half of 2009 will be prepared in February-March 2010. The auditor will be Ernst & Young. To date, RZD has only issued financial reports on an annual basis.