Page 66 - UKRRptSept21

argues that it should not be considered liable as this borrowed money was spent on improving Donetsk Railway’s rail infrastructure, which, following Russia’s invasion, fell under the control of the Kremlin.
Ukraine railway product exports inched up 2% m/m in July. Ukraine’s exports of railway products amounted to 14.0 kt in July, a 2% m/m gain but 10% below the average 2020 level, according to Concorde Capital’s analysis of State customs service’s goods exports data.
Exports amounted to 13.3 kt per month in 7M21 (93.3 kt for the period), 14% less than the 2020 average of 15.6 kt per month.
Exports to Russia amounted to 0.3 kt in July, 2.1x more m/m but 94% less than the 2020 average of 5.0 kt per month.
Exports to Belarus amounted to 5.9 kt in July, 18% more m/m and 98% higher than the 2020 average of 3.0 kt per month.
The average export price for the railway products was flat m/m in July at $1,386/t.
Ukraine’s largest railway wheel producer is Interpipe percentage , which in 2020 exported 165 kt of railway products (13.8 kt per month).
Recall, Russia banned imports of railway products from Ukraine from early February.
Dmytro Khoroshun: Interpipe likely continues maintaining the volumes of its sales to Belarus at high levels, which might limit the y/y drop in sales driven by Russia’s ban.
Nevertheless, the EBITDA (before reallocation from the steel segment) of Interpipe’s railway product segment will drop substantially y/y in 2021, possibly by as much as 40-50%, we continue to expect. This drop will mostly be due to a 33% drop in prices for exports of railway products during 2020. Interpipe’ wheel sales volumes will also likely drop y/y in 2021.
The company’s overall profitability will also be squeezed in 2021 by the cost increases for inputs such as steel scrap and energy.
Ukrainian Railways gets new acting CEO, rate increase approval. Cabinet of Ministers approved on August 11 the appointment of Oleksandr Kamyshin as the new acting CEO of Ukrainian Railways, Interfax-Ukraine reported the same day.
Since June, Kamyshin has been an advisor to the Infrastructure Minister. In 2012-2019 he worked for Ukraine’s largest business group, SCM of Rinat Akhmetov. Recall, he was offered the position of acting CEO by Ukrainian Railways’ supervisory board last weekend.
66 UKRAINE Country Report September 2021 www.intellinews.com