Page 137 - RusRPTOct20

Cost of repairs.​ Expenses for spare parts and repairs were around RUB490/day in August, down 19% YTD. This rate is the minimum level to, which gondolas rates could fall.
Railcars.​ The gondola fleet increased 1,193 units in July to 570,697 cars, and is up 2% YTD. The oil tanks fleet was at 178,094 cars, seeing a write-off of 809 cars.
Outlook.​ August showed a decline of 1% y/y in volumes, which was better than RZD’s expectation of 5% y/y. We think the reason was coal volumes, with their decline stopping on the eve of the heating season. Other than that, we do not see a fundamental improvement in this segment: demand for coal in Europe is down, and Russian mines are cutting production. Oil volumes are to remain depressed under the OPEC+ agreement and lower demand.
Globaltrans released 1H20 results on September 1 that were above estimates​. Analysts have adjusted our forecasts and raised target price by 5%. Improved visibility on the dividends to be paid from the 2H20 results (the NTM dividend yield may reach 16%), as well as the company's cautious optimism on 2H20 given the developments of July and August, should be supportive for the stock. Moreover, the company announced that it is preparing for a local listing, which is something we had flagged as a potential driver in a recent note. The listing is expected to take place by the end of the year. We maintain a positive view on the stock and reiterate our BUY, now with a $9.08 per share DCF-derived target price. Target price updated after 1H20 results and new capex guidance. The 1H20 results were above our expectations, as the rail tank segment proved more resilient than we had anticipated. We have updated our full-year forecasts to account for this, also incorporating the company's updated capex guidance (R7.3bn, versus our previous estimate of R9bn). Recent rail statistics supportive. Recent data from Russian Railways looked positive for the cargo transportation segment, indicating that the y/y decline in transportation volumes in tonnes eased from 4.5% in 6m20 to 4.0% in 8m20, with the drop in freight turnover easing from 5.3% to 4.0%. Freight turnover returned to growth in y/y terms in August, up 1.2% from last August (see the table and charts on the following page).
● Ships
The volume of cargo shipped by the Russian Arctic Sea route shipping will top 32mn tons this year ​says Director General of the State Atomic Energy Corporation Rosatom Alexey Likhachev that operates the Arctic icebreaker fleet. "The plan for this year's freight traffic along the Northern Sea Route was 29mn tons, but today our forecast is that it will exceed 32mn tons," Likhachev told Rossiya 24 TV channel. Earlier, he said that by 2024 the volume of freight transportation via the Northern Sea Route (NSR) could reach
137 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com