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made a special emphasis on the connection with eastern regions and introduced new routes to the most remote places," Kravtsov said, as cited by Ukrinform. According to him, 126 passenger cars were renewed last year, and this work will be continued in 2019. Kravtsov also stressed that the volume of freight transportation in the main directions (agrarian, metallurgy) were also increased. "Despite fears, we successfully completed the 2018 agrarian season, the harvest was transported," added Kravtsov.
Ukrzaliznytsia (Ukrainian Railway) expects that revenue to increase 16% y/y to UAH85.5bn in 2018 (3% below plan), while its EBITDA will decline 10% y/y to UAH18.1bn (9% below plan), according to its draft financial plan for 2019 published on its website, Concorde Capital said in a note on December 17. The key factor of the company’s revenue underperformance is its smaller-than-budgeted freight turnover (-5% compared to plan). The key factor of its EBITDA under-performance is higher-than-budgeted increase of its salary and social expenditures (UAH40.0bn, up 29% y/y and 8% higher than plan). In 2019, the company’s management plans to boost its net revenue 28% y/y (to UAH109.2bn), mostly relying on a 31% y/y increase of revenue from freight transportation (to UAH89.2bn) amid an expected increase of average freight rates (by 28% y/y), as well as higher freight turnover (+2% y/y). Ukrainian Railway expects that its key cost component, salary and social expenditures, will increase only 13% y/y, while the average salary hike will amount to 19% y/y in 2019. The company’s 2019 EBITDA is planned at UAH27.8bn, or 54% more y/y. Ukrainian Railway expects its capital expenditures to be UAH16.4bn in 2018 (35% below plan, but 50% higher y/y). In 2019, the company plans to invest UAH24.5bn (50% more y/y). The company’s 2019 financial plan outlines a careful approach to new borrowings, planning to attract UAH3.5bn from the EBRD (for ongoing infrastructure and railcar projects), as well as net UAH7.6bn in loans on the local market. Among its key repayments are UAH9.1bn for the amortization of its Eurobonds ($300mn due in 2019). Its total debt is planned to increase from UAH43.0bn at the beginning of 2019 to UAH48.4bn as of the year’s end.
9.2.5 Retail corporate news
Auchan Ukraine Hypermarket, the local operations of French retailer Auchan.is going to open its third store in Lviv , according to the company's media office. The area of the store will be 5,000 square metres. The facility will have a pizza island, a fresh bar, and an organic products and goods department. The first store Auchan Sokolnyky was opened in 2010, the second one Auchan Pivdenny in 2015, Interfax news agency reported on December 7. In 2017, Auchan Retail Ukraine, bought Ukrainian distributor Caravan , which operates nine Ukrainian-based hypermarkets with around 3,300 employees. Caravan operates nine hypermarkets and superstores and employs 3,300 people in Ukraine. The deal will enable Auchan to beef up its presence in Kiev and expand to four new cities: Kharkiv, Dnipro, Zhytomyr and Chernivtsi. Auchan, which is present in 17 countries, operates 11 hypermarkets in five Ukrainian cities and employs 3,600 people. Foreign retailers are starting to move into Ukraine as the economy stabilises and incomes grow. Swedish furniture giant IKEA is going to open its first Ukrainian store in 2019 , Ukrainian President Petro Poroshenko said during a meeting with IKEA Southeast Europe CEO Stefan Vanoverbeke on September 12. This is Ikea’s third attempt at entering the market. Swedish furniture company Ikea had plans to build six hypermarkets in Kyiv, Kharkiv, Dnipropetrovsk, Odessa , Donetsk ,
74 UKRAINE Country Report February 2019 www.intellinews.com