OREANDA-NEWS. August 22, 2011. Russian Railways ended the first six months of 2011 with positive financial and economic results. Net profit under Russian Accounting Standards (RAS) amounted to 48.5 billion roubles, 17.1% lower than during the same period in 2010, reported the press-centre of Russian Railways.

Freight shipped on the rail network during the reporting period increased to 607.7 million tons, 4% more than in January-June 2010. The growth in shipping volume was due primarily to higher output in mining, mainly of coal and ores, and the growth of industrial production in Russia.

Cargo turnover rose to 1,330.7 billion ton-km, which is 10% more than in January-June 2010.

Russian Railways revenues from core activities during the first half of 2011 increased by 10.8% compared to the same period in 2010 and amounted to 644.7 billion roubles.

Earnings from freight shipments increased by 7.8% to 498.7 billion roubles due to growth in loading volumes and an increase in tariff rates.

Revenues from passenger services totalled more than 3.3 billion roubles. Compared to 2010, passenger revenues fell by 90%, partly due to the First Passenger Company beginning operations on 1 April 2010, and partly due to suburban passenger subsidiaries assuming virtually all services on suburban routes from 1 January 2011.

The commodity markets, however, continue to see price increases, which in turn increases the price pressures on the Company's expenditure side.

Given the structure of operating expenses at Russian Railways, aggregate pricing pressure on the Company’s operating costs increased by 14.8% in the first half of 2011, although expenditures on the transportation side during the same period increased by just 3.7%, an indication of the Company’s effective cost management.

Russian Railways reduced its costs on the transportation side during the reporting period by 5.4% compared to 2010.

State support for Russian Railways declined in 2011. In the first half of 2011, Russian Railways received 41.8 billion roubles from the budget, including contributions of 40 billion roubles paid into the Company’s registered capital for the construction of Olympic facilities, subsidies of 0.8 billion roubles for the protection of railway transportation infrastructure against acts of unlawful interference and 0.9 billion roubles from the state support programme for freight shippers and members of the wider population who received social benefits via the budget of Russian Railways.

A positive result amounting to 6.2 billion roubles was also achieved from other sources of revenues and expenditures. This was mainly due to a positive result from exchange rate differences following the appreciation of the rouble and the excess of the cash value agreed upon by the founders over the balance-sheet value of the property transferred to the authorised capital stock of the Company’s subsidiaries.

Revenues at Russian Railways for the first half of 2010 amounted to 581.8 billion roubles, while net profit stood at 58.5 billion roubles.