Financial Statements (RAS)
Revenue
Revenue from passenger services
Revenues from passenger traffic totalled RUB 221.0 billion in 2022 as a result of rising demand for long-distance rail transit, up 32.5% year-on-year.
The deregulated segment exhibited the most noticeable revenue growth pattern, with passenger transport in first-class and second-class sleeping carriages seeing a year-on-year gain of 36.2%, and total proceeds amounted to RUB 109.7 billion by the end of 2022. For the first time in the previous three calendar years, revenues from international service exceeded the RUB 6.4 billion level.
The regulated segment of passengers servicing by third-class sleeping carriages and fourth-class seating carriages generated RUB 97.2 billion in 2022, which is 27.4% higher than in 2021.
Revenues from baggage, unaccompanied baggage, and mail transportation increased by 7.8% compared to 2021 and amounted to RUB 7.7 billion
Revenue from other activities
FPC’s other activities include:
- Repair of clients’ rolling stock;
- Provision of value-added services on trains;
- Lease of movable and immovable property;
- Other services.
Over 2022, revenues from other activities amounted to RUB 29.5 billion, up 37.2% year-on-year.
The considerable increase was primarily brought about by a rise in lease income (+96.3%) as a result of an increase in carriage leasing applications. The revenue from additional services provided in trains (up 27.5% year-on-year) was driven up by an increase in the number of passengers carried in FPC-marshalled trains; the revenue from the repair and maintenance of customer rolling stock (up 13.0% year-on-year) increased as the customers placed more requests for depot repairs and maintenance of carriages. These two factors contributed the most to the positive behaviour of revenue from other activities.
Expenses
Rail service expenses
Based on the 2022 results, the costs of transportation activities amounted to RUB 215.9 billion, or 115.5% compared to the 2021 level (127.7% compared to the 2020 level).
The net cost of passenger services in 2022 was RUB 26.6/10 passenger-km, or 98.7% vs. 2021 (75.8% against 2020).
Expenses on other activities
In 2022, revenue from other activities totalled RUB 20.3 billion, up 22.2% year-on-year.
Key drivers behind the year-on-year growth were as follows: a 39% increase in expenses associated with the lease of property (due to an increase in the number of requests to lease passenger cars) and an increase in expenses associated with the provision of additional services in trains (up 23.7% year-on-year), which resulted from an increase in the volume of passengers carried on FPC-marshalled trains, an increase in expenses associated with the provision of other services (up 8.4% year-on-year), which stemmed from growing demand for goods sold on trains, and an increase in overheads allocated to other activities.
Overhauls programme
In 2022, actual expenses on overhauls of fixed assets were RUB 2.9 billion, or 146.8% of the 2021 level, including:
- RUB 2.5 billion on overhauls of passenger carriages (147.0% of the 2021 level)
- RUB 0.4 billion for third-party capital repairs of buildings, structures and equipment (up 145.0% year-on-year)
Headcount and Labour Productivity
Labour productivity in 2022 increased by 22.7% compared to 2021, due to a 19.9% increase in transportation volumes and a downsizing of FPC’s workforce as a result of optimisation of production capacity in Q4 2021.
Other Revenue and Expenses
The loss for 2022 was RUB 0.6 billion, while 2021 saw a profit of RUB 8.4 billion. This negative trend was caused by the introduction of federal accounting standards FAS 6/2020 Property, Plant and Equipment and FAS 26/2020 Capital Investments on 1 January 2022. As required by these standards, the Company worked on the impairment of individual fixed assets, as well as the depreciation of laid-up fixed assets.
Key revenues received as part of other FPC’s income were government subsidies allocated as compensation for the revenue shortfall caused by the government regulation of long-distance tariffs for third-class open sleeping and fourth-class seating carriages. In 2022, federal subsidies amounted to RUB 12.1 billion (RUB 11.1 billion in 2021).
Interest expenses on loans accounted for the bulk of other expenses, amounting to RUB 6.1 billion in 2022 (RUB 5.0 billion in 2021).
Liabilities
As at 31 December 2022, principal repayments were RUB 66.5 billion, including RUB 28.0 billion
There are no liabilities denominated in foreign currencies.
The nearest maturity date for the bonds is May 2023, with a total of RUB 25.5 billion of bonds expected to be repaid between 2024 and 2028.
The values of the financial covenants for 2022 did not exceed the maximum permissible limits.
Balance Sheet Total
The balance sheet total for 2022 increased by RUB 24 billion, or 7%. The increase in the asset side of the balance sheet resulted from both current assets and non-current assets. The increase in the liabilities side of the balance sheet resulted exclusively from an increase in equity and reserves, while long-term and short-term liabilities of the Company, on the other hand, decreased.
As at 31 December 2022, FPC’s non-current liabilities totalled RUB 41.6 billion, including loans and borrowings in the amount of RUB 41.5 billion.
As of 31 December 2022, short-term liabilities of FPC amounted to RUB 65.9 billion, including RUB 33.6 billion of payables, RUB 25.6 billion of loans and borrowings.
The size of FPC’s authorised capital was RUB 248,588,839 thousand as at 31 December 2022.
In the reporting year, the Company’s net assets increased by 18% to RUB 250.8 billion
Inventories
As at 31 December 2022, FPC’s actual inventories amounted to RUB 6.021 billion, including RUB 0.172 billion worth of fuel, against the set standard of RUB 6.725 billion, including RUB 0.260 billion worth of fuel. There was no excess of actual inventory over the standard.
The year-on-year increase in the level of inventories in 2022 is associated with a growth in the volume, nomenclature and share of the insurance stock of basic materials and spare parts for carriages. This increase is necessary to organize uninterrupted material and technical support for the transportation process under conditions of global economic and financial instability and unfriendly actions by European states toward the Russian Federation.
The largest share of inventories is represented by passenger carriage spare parts at RUB 3.836 billion (64% of inventories in total), consisting of new spare parts (RUB 2.078 billion) and reusable materials (RUB 1.758 billion), including passenger carriage wheelsets (RUB 1.174 billion).
Receivables and Payables
As at 31 December 2022, FPC’s receivables totalled RUB 24.16 billion.
Trade receivables (except for rail services) accounted for 43.1% of total receivables, or RUB 10.42 billion. The bulk of this debt, RUB 7.89 billion, was due to the application of the terms of settlements stipulated by the long-term contract.
Taxes, fees and charges receivables accounted for 40.1%, or RUB 9.70 billion.
The largest specific weight in the structure of trade receivables (except for transportation) is represented by receivables under agreements to purchase and sell property — 82.6%, or RUB 8.62 billion, as well as receivables under agreements to lease rolling stock — 12.5%, or RUB 1.30 billion.
Trade receivables due for passenger services amounted to RUB 1.88 billion, or 7.8%, which is in line with the terms of relevant contracts.
Advances issued as of the end of December 2022 accounted for 5.0% of total accounts receivable, or RUB 1.21 billion
Accounts payable at the end of 2022 decreased by 32.3% year-on-year and reached RUB 33.61 billion. Such a significant decrease was driven by the repayment of the restructured debt of the Parent Company restructured debt for 2021. The largest share in accounts payable is represented by trade payables –38.9%, or RUB 13.09 billion, and advances received for transportation – 31.83%, or RUB 10.70 billion
As payables are above receivables, the Company can use payables as an additional source of financing. Receivables to payables ratio is 0.72.
Cash FlowsIn accordance with the management accounting data.
Cash balance on accounts of FPC (including short-term deposits) as at 1 January 2022 stood at RUB 3.0 billion.
Cash flows from operations
In 2022, the cash flow from operating activities totalled RUB 322.2 billion, including RUB 12.1 billion of subsidies from the federal budget. Most cash (71%) was received from passenger services, totalling RUB 227.3 billion excluding transit charges.
Operating expenses amounted to RUB 276.3 billion, including expenses for infrastructure services and locomotive lease totalling RUB 148.7 billion, or 54%.
Net cash flow from operations was RUB 45.9 billion.
Cash flows from investing activities
Expenses for investment activities totalled RUB 65.6 billion.
In the reporting period, RUB 39.2 billion were allocated for passenger rolling stock replacement and upgrades:
- RUB 30.5 billion for the acquisition of new passenger carriages;
- RUB 8.7 billion for passenger rolling stock upgrades.
Negative cash flow from investing activities amounted to RUB 62.6 billion
Cash flows from financing activities
In 2022, cash received from financing activities totalled RUB 50.6 billion (of which 47% was attributed to borrowings).
Cash outflow in the amount of RUB billion 28.1 billion resulted from:
- Interest payments on loans and borrowings – RUB 6.1 billion
- Repayment of loans and borrowings – RUB 22.0 billion.
Net cash flows from financing activities totalled RUB 22.5 billion.
The total net cash flow of FPC from operating, investing and financing activities for the reporting period was RUB 5.9 billion.
Cash balance on accounts of FPC (including short-term deposits) as at 1 January 2022 stood at RUB 8.8 billion
The ratio is the most stringent solvency criterion, showing how much short-term debt can be covered by the Company immediately if necessary by the available cash and highly liquid short-term investments.
In 2022, the ratio increased by 0.09 p.p. compared to the same period of the previous year (0.04 in 2021).
The ratio shows how much short-term debt can be covered by the Company if its receivables are fully repaid (where payments are expected within 12 months after the reporting date).
In 2022, the ratio increased by 0.15 p.p. compared to the previous period (0.23 in 2021).
The ratio shows how much short-term debt can be covered by the Company by its current assets. In contrast to the absolute and quick liquidity ratios, this indicator shows the Company’s solvency over a relatively longer term.
In 2022, the ratio increased by 0.19 p.p. compared to the previous period (0.30 in 2021).
The ratio shows the share of the Company’s assets that are covered by its funds. The higher the ratio, the more financially stable the Company is and the lower its reliance on third-party loans. From an investor or creditor’s perspective, the higher the ratio, the lower the risk of losing investments in the Company or loans extended to the Company.
The ratio increased by 0.06 p.p. in 2022 (0.64 in 2021).
It is an indicator of the Company’s financial performance, indicating the share of profit in the Company’s revenue. Sales margin shows the effectiveness of the Company’s pricing policy and its ability to control costs. It indicates the share of gross profit in the Company’s sales.
In 2022, the ratio increased by 11.2 p.p. compared to the previous period (3.7% in 2021).
This indicator is one of the key indicators of the Company’s performance, used to evaluate its investment appeal over the longer term and showing how many units of net profit the Company generates with each unit of shareholders’ equity.
In 2022, the ratio increased by 7.3 p.p. compared to the previous period
This financial ratio shows the return on all assets used by the Company. The ratio indicates the Company’s ability to generate profit without taking into account its capital structure (financial leverage), as well as the quality of asset management.
In 2022, the ratio increased by 9.0 p.p. compared to the previous period
The lower share of borrowings in the balance sheet total (0.36 in 2021) clearly demonstrates the trend towards stronger financial stability of the Company. Accordingly, the higher the share of own funds in the balance sheet total, the better the financial position of the Company.
This indicator shows the Company’s debt burden and its ability to repay existing liabilities (solvency).
In 2022, the ratio increased by 2.53 p.p. compared to the previous period (4.15 in 2021).
This indicator shows the Company’s debt burden vs its total revenue (0.35 in 2021).
Financial leverage indicates the ratio of borrowings to total capitalisation and shows how efficiently the Company uses its equity. It determines the degree of the Company’s reliance on borrowings. The capitalisation ratio is used only in the same industry context and in the context of the Company’s revenue and cash (0.31 in 2021).
The net value of FPC assets as at 31 December 2022 is RUB 250.9 billion and exceeds the Company’s authorised capital (RUB 248.6 billion as at 31 December 2022). This indicates compliance with the mandatory provisions of Federal Law No. 208-FZ dated 26 December 1995 On Joint Stock Companies concerning the net asset value of joint stock companies.