Page 67 - UKRRptSept20

of active drilling operations in 1H will lead to a gradual decline of hydrocarbon output in Ukraine (by 6-7% on quarterly basis). The recovery of drilling and workover operations in late 2H20, along with the expected recovery of natural gas prices, should result in JKX’s P&L improving in 2021. We remain positive on JKX's mid-term value growth,” Paraschiy added.
9.2.3​ Transport corporate news
The Cabinet of Ministers approved Volodymyr Zhmak for the position of CEO of​ ​Ukrzaliznytsia​ (Ukrainian Railway​), Interfax-Ukraine reported on August 26 citing PM Denys Shmyhal. Before the appointment, Zhmak was the head of the supervisory board of Ukraine’s largest airport, Boryspil. After the dismissal of the previous CEO, Yevhen Kravtsov, in January, the company had two acting CEOs, with the latest one, ​Ivan Yuryk, appointed in April​. Two weeks ago, Infrastructure Minister Vladyslav Krykliy promised that a new CEO will be appointed on August 19, while media reported that the company’s supervisory board ​recommended that the Cabinet appoint Zhmak​. In an interview with the ​liga.net​ news site published on August 26, Zhmak said that his key priority in Ukrainian Railways is the creation of four vertically integrated and self-sufficient divisions (infrastructure, passenger transportation, cargo and container transportation) and spinning off auxiliary divisions. He also plans to improve the quality of cargo transportation and to offer unified transportation tariffs for all cargos.
DCH, one of the largest investment groups in Eastern Ukraine, has reached a deal to develop airplane engine maker Motor Sich with Chinese investors Skyrizon Aircraft Holdings Limited​. Last year, the US sought to block a Skyrizon takeover the company, which makes advanced engines for fighter jets. Erik Prince, a US private security contractor and informal adviser to President Trump visited the Zaporizhia plant several times over the last year. “Both parties will conduct comprehensive cooperation by carrying out activities to improve the Ukrainian aircraft industry jointly and, in particular, PJSC Motor Sich in Zaporizhia,” DCH said of the partnership with China, without specifying investment amounts or targets. DCH built the new air terminal for Kharkiv. Now it is building a new airport for Dnipro, about 90 miles north of Zaporizhia.
SkyUp, Ukraine’s discount airline, lost more than $30mn in the first half of this year, ​the airline tells Interfax-Ukraine. During the first half of this year, SkyUp’s passenger count fell 15% y/y, to 568,900 passengers. It also laid off 10% of its staff. The airline reports flights on his domestic routes average 62% full. Charging $18-28 for a one-way ticket, SkyUp serves Kyiv, Kharkiv, Kherson, Lviv, Odesa, and Zaporizhia. Its international flights -- to Tirana, Albania and to Burgas, Bulgaria -- are 100% full.
With the EU largely closed to Ukrainians, UIA has cancelled its flights to 10 cities for the rest of August​: Athens, Barcelona, Baku, Berlin, Chisinau, Frankfurt, Larnaca, Prague, Rome and Vienna. Ukraine’s flag carrier is also cutting frequencies from Kyiv Boryspil to these EU cities: Amsterdam, London, Milan Naples, Nice, and Paris.
S&P Global Ratings upgraded on July 29 the long-term issuer credit rating for Ukrainian Railways to B- from CCC​, keeping the rating’s outlook at Negative. The upgrade reflected “the removal of immediate liquidity pressure” following the company’s successful restructuring of about $200mn in
67​ UKRAINE Country Report​ September 2020 ​ ​www.intellinews.com