However, Ebitia dropped by 23% in 2011 to Roubles 356bn, and net profit fell by 12% to Roubles 183bn helped by the sale of shares in Freight One.

The reduction in profitability stems from a 20% increase in operating expenses. In 2009, RZD initiated a number of cost reduction actions to mitigate the impact of the global financial crisis which included deferring some expenditure. These measures came to an end last year which pushed up operating costs. In particular, infrastructure repairs and upgrades and steps to increase passenger train speeds added an extra Roubles 58bn to costs. Social tax payments increased by Roubles 36bn, and energy costs rose by Roubles 29.1bn.

Nevertheless, RZD says its Ebitda margin of 24% in 2011 is in line with its expectation and reflects normal Ebitda marginality for the railway's overall business.