The head of FGC: the company expects a loss under RAS for the end of 2015 to 8.5 billion rubles

The head of FGC: the company expects a loss under RAS for the end of 2015 to 8.5 billion rubles

MOSCOW, March 4. Net loss of JSC “Federal freight company” (FGC, a 100% subsidiary of JSC “RZD”) under Russian accounting standards (RAS) by the end of 2015 could reach about 8.5 billion rubles, reported to journalists the General Director of the company Alexey Taycher.

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Loss of FFC by the end of 2014 amounted to $ 3.6 billion.

According to Teicher, mostly on the financial result was influenced by the low rates in the freight market.

“This year goal is to become break-even”, – said the head of FGC.

In addition, Taycher said that this year will be developed the development strategy of Railways till 2020. “There is a market model that should be adopted in the near future. Based on the market model, it is necessary to adopt a strategy for the development of FFC, because it must be based on the market model. Now there’s tactics: operating an efficient company that is able to survive, to reproduce fixed assets and to provide service to his clients, as much as possible, as efficiently for the price”, – said the head of FGC. According to him, the strategy should be formulated within four months after the target model of railway transportation market. Earlier it was reported that this document could be ready before the end of the first quarter of 2016.

The innovative gondola cars

Also Taycher said that FGC plans in 2016 to buy a 4 thousand innovative gondola cars.

“The FGC investment programme for 2016 provides for the purchase of 4 thousand gondolas”, – said the head of FGC.

According to him, it is likely that an open tender for the supply of rolling stock will be divided into several lots. “In the near future we plan to buy about 300 cars. We plan to buy innovative cars. 300 cars, the company certainly will buy the rest depending on how the situation will develop,” said Taycher.

“If we 4 thousand cars will buy, we will borrow, because it’s at least 8 billion rubles. So, of course, we’ll be funded externally. While the most intuitive and accessible way – it leasing, therefore, most likely, it will be a lease deal,” he explained.

Work on the territory of Ukraine

Taycher stated that FGC continues to operate on the territory of Ukraine in a normal mode.

“The representation of (in Ukraine – ed.) there, the office is working, your budget and performs the loading of doing this,” he said.

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FGC also has a representative office in Kazakhstan. According to Teicher, the company has no plans to open branches in other countries.

Previously, another major Russian railway operator freight one to Vladimir Lisin withdrew all the cars of its Ukrainian “daughters”, which is under sanctions from the territory of Ukraine.

In the sanctions list published in September 2015 on the website of the President of Ukraine, entered FO and its Ukrainian “daughter” – OJSC “freight one in Ukraine” (PHCU), the share in the consolidated turnover of freight one is about 2.5%. According to the document, companies are prohibited to transport and transit through the territory of Ukraine. ISC announced that it would interact with Ukrzaliznytsia to develop future work.

The Ministry of transport of the Russian Federation stated that the exclusion of Ukraine from the working fleet of about 5 thousand cars can lead to lack of cars on the domestic market and growth rates for the transportation of goods.

The management of Russian Railways

Taycher also noted that Federal freight company since 1 March 2016 returned their cars under the management of the transport service Centre (center of corporate transport services, a branch of RZD) and has been running the gondola “UVZ-Logistik” transport “daughter” of the Corporation “Uralvagonzavod”.

“This transfer occurred from March 1, the entire fleet of gondolas FGC and those who were in control of “UVZ-logistics”, manages Federal freight on their own. Before that was an Agency agreement, we have defined the commercial terms of traffic and ran the cars for Russian Railways is now the commercial and production functions are fully returned to the FGC, that is, FGC is a full – fledged operator,” he said.

“UVZ-Logistik” in November 2015 passed approximately 30 thousand gondolas in the management center of corporate transport services. In addition, the management center of corporate transport services, there were 91 thousand gondola cars owned FGC. Thus, the Park in the management of Russian Railways totaled about 120 thousand of gondola cars, which is about a third of the total fleet of gondola cars in Russia.

According to Teicher, the next step in the Park’s attitude of “UVZ-Logistik” – it leasing LTD. “This is different from management in that the rates are already fixed, and our commitment to “UVZ-Logistik” is also fixed, regardless of how we worked. For the conclusion of the lease agreement the approval of the creditor banks – Sberbank and Gazprombank, which are financed by “UVZ-logistics” – and the approval of the Federal Antimonopoly service”, – said the head of FGC.

He noted that the need for approval of transactions with FAS is due, in particular, the fact that the rent transferred 100% of cars the company.

Taycher explained that the transfer of cars “UVZ-Logistik” to rent FGC does not affect the ability to sell UVZ operator. “UVZ can sell “UVZ-Logistik” to anyone, and, respectively, then the new owner will receive rent payments,” he said. While FGC is considering the purchase of the company. “The third step, about which we think and conduct negotiations, which are looking to find the best deal for FHA buy a “UVZ-logistics”. The path is still quite long, to say that there are some agreed conditions of the transaction sooner,” added Taycher.

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“UVZ-logistic” was founded in 2010, is included in a transport group Corporation “Uralvagonzavod”. Provides rail freight transportation. 50% of shares owns UVSL structure “Uralvagonzavod”, JSC “the Ural supersize technics – UVZ”, 30% in LLC “Altsina” (Moscow), 10% in LLC “transkom – Ural” (Nizhny Tagil), 6% in LLC “Himcolinbest” (Moscow), 4% in LLC “TRANS – Capital” (Moscow).

The expansion of the fleet

Taycher said that the FFC expects in 2016 to take up to 30% of the rail freight market with the total number of Park 120-150 thousand units.

According to him, for the 2015-2016 FGC expects the disposal of 50 thousand cars in connection with the expiration of service.

“If it turns out not only to substitute (the retired cars – approx.ed.), but to grow wisely, we limit see your presence in the market about 30% as a benchmark. We this year we see 120-150 thousand cars taking into account previously raised under long-term leases and planned to attract this year,” said Taycher.

Today, the Park FFC has 125 thousand cars. The company since March 1, returned their cars under the management of the transport service Centre (center of corporate transport services, a branch of RZD) and has been running about 30 thousand gondolas “UVZ-Logistik” transport “daughter” of the Corporation “Uralvagonzavod”. The next stage is to draw up the wagons “UVZ-Logistik” to rent.

Taycher said that in the current environment, renting is the most attractive way to grow the Park. According to him, the FGC interesting rent of 1 thousand cars or more.

“Negotiating with Transgarant, negotiating with Brunswick Rail – with those who have a significant number of gondolas – from 1 thousand and more. With the STLC we also negotiate, but so far their offers have not received”, – he said.

Commenting on the consolidation of the Park leasing companies on the basis of FGC, Taycher said no negotiations, in particular, with ‘VEB-leasing” the company now does not. However, he said, “in the case of negative development of the situation around “VEB-Leasing” FFC and STLC will have to submit their proposals. “If it comes to that, it will give the same offer as the others – to take the cars to rent for short term or long term basis,” he said.

JSC “Federal freight company” has started its business activities in 2010. The main activity of company is provision of own rolling stock for transportation, and the provision of freight forwarding and other services. Federal freight wagon fleet consists of 125 thousand units of rolling stock. The volume of traffic in 2015 rose by 2.2% to 165,5 million tons.