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May 18, 2009

RZD records first quarter loss

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RUSSIAN Railways (RZD) made a loss of Roubles 17.1 billion ($US 510 million) in the first quarter of this year compared with a profit of Roubles 19.7 billion for the same period in 2008. The main cause is a 27.1% drop in freight traffic and a 12.3% fall in passenger journeys. RZD's financial performance was also adversely affected by the devaluation of the rouble, and higher electricity and diesel fuel costs.
RZD has launched a cost-cutting programme to reduce costs by Roubles 173.1 billion, but it is forecasting a net loss of Roubles 14.2 billion for the second quarter of this year. Nevertheless, Mr Vladimir Yakunin, RZD's president, says the railway invested Roubles 55.7 billion during the first quarter which equates to 22.3% of the annual investment budget.

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