Analysis of income from transportation activities

Freight transportation accounted for 79.7% of Russian Railways’ total income in 2015.

Income from freight transportation

Russian Railways had total income of RUB 1,203.9 bln in 2015, an increase of RUB 98.3 bln, or 8.9%, compared with 2014.

The change in income versus the previous year resulted from the following factors:

• 0.01% growth in freight turnover versus 2014 influenced the increase in income by RUB 0.1 bln;
• 8.9% growth in the average revenue rate per 10 tkm led to additional income of RUB 98.2 bln due to the following main factors:
  • the indexation of the freight transportation tariff by 10% resulted in additional income of RUB 106.1 bln;
  • the right to change tariffs within the tariff corridor, including using multipliers for freight transportation for export, which generated an additional RUB 23.4 bln;
  • at the same time, a number of negative factors resulting from changes to the transportation structure influenced the change in income (RUB —31.3 bln):
  • for types of goods (RUB —8.2 bln) due to growth in the proportion of first-class freight combined with a decline in the share of second- and third-class freight;
  • for types of traffic (RUB —10.1 bln) due to a decrease in the proportion of transit freight turnover, domestic shipments and international shipments via border crossings combined with a simultaneous increase in the proportion of less profitable freight coming through Russian ports;
  • for shipment categories growth in the proportion of block train shipments using a reduction factor vs. Price List 10-01 of up to 15% combined with a decrease in the share of railcar shipments influenced the decrease in income by RUB 3.7 bln;
  • a decrease in the revenue rate for empty runs based on the railcar type (RUB —6.2 bln);
  • a change to the share of transit shipments with calculation based on the rates of the CIS tariff policy and Price List 10-01 (RUB —3.1 bln).

Income from long-haul passenger transportation

Russian Railways provides long-haul passenger transportation on the Sapsan, Lastochka (Desiro RUS) and Allegro trains.

Income from such transportation totalled RUB 11.2 bln in 2015, an increase of RUB 2.1 bln, or 23%, versus the previous year.

The main factor behind the increase in income from long-haul passenger transportation by high-speed trains was a 22% increase in the number of passengers transported compared with 2014 to 4.8 mln.

The primary reasons for growth in the number of passengers transported include:

• the assignment of 56 additional Sapsan train pairs on the Moscow-St Petersburg route (on holidays and also for the St Petersburg International Economic Forum);
• the assignment of two daily Lastochka (Desiro RUS) electric train pairs on the Rostov-Krasnodar route starting in March 2015;
• the assignment of one daily train pair on the Adler-Maykop route starting in May 2015.

Income from suburban passenger transportation

Income from suburban passenger transportation amounted to RUB 0.5 bln in 2015.

Russian Railways provides suburban passenger transportation as a carrier in the Krasnodar Region using twelve daily Desiro RUS (Lastochka) trains on sections of the Sochi operating domain (six pairs each on the routes Olympic Park-Tuapse and Sochi-Roza Khutor) from 1 January to 29 June 2015 and 20 daily train pairs starting from 30 June 2015 (five pairs for Olympic Park-Tuapse, one pair for Olympic Park-Lazarevskaya, six pairs for Sochi-Roza Khutor, two pairs for Aeroport-Lazarevskoye, two pairs for Aeroport-Tuapse, two pairs for Aeroport-Sochi and two pairs for Aeroport-Roza Khutor).

Income from infrastructure services

Income from infrastructure services totalled RUB 99.8 bln in 2015, an increase of RUB 0.7 bln, or 0.8%, from 2014.

The change in income versus the previous year occurred for the following reasons:

• increased income from the provision of infrastructure services for passenger transportation amounted to RUB 2.3 bln, including RUB 0.6 bln from long-haul infrastructure services and RUB 1.7 bln from suburban infrastructure services due to the following factors:
  • growth in the average revenue rate, including due to the indexation of the tariff for infrastructure services at 10%, led to an increase in income of RUB 9.9 bln, including RUB 7.3 bln for long-haul transportation and RUB 2.6 bln for suburban transportation;
  • an 8.9% decrease in the volume of long-haul and suburban passenger transportation as measured in railcar km compared with 2014 as a result of traffic optimisation by carriers led to reduced income of RUB 7.6 bln, including a decrease of RUB 6.7 bln in long-haul transportation and RUB 0.9 bln in suburban transportation;
• income from the provision of infrastructure services for freight transportation decreased by RUB 1.6 bln versus the previous year, including due to:
  • a decrease in the number of railcars left on infrastructure due to a reduction in the working railcar fleet (RUB —0.5 bln). The working railcar fleet decreased 5.4% (-55,000 units) in size in 2015 versus the 2014 level;
  • changes to the tariff level for services involving the occupation of railway transportation infrastructure due to the introduction on 7 June 2015 of new rates established by Order No. 127-T/l of the Russian Federal Tariffs Service dated 29 April 2015, which are almost 63% lower than the Russian contractual tariffs of Russian Railways that had previously been in effect (RUB —1.1 bln).

Income from locomotive traction services

Income from locomotive traction services totalled RUB 10.5 bln in 2015, an increase of RUB 0.26 bln, or 2.5%, from the previous year.