BAKU, Azerbaijan, October 16
By Tamilla Mammadova – Trend:
Georgian Railway (GR) generated $80.8 million in revenue in 1H2020, which is 5.1 percent lower compared to the same period last year, Trend reports via the Georgian Galt & Taggart investment company.
Strong growth in revenue in 1Q2020 (+7.4 percent year-on-year to $42 million), mostly helped by robust performance in the first two months of the year, was not enough to offset the sharp decline in GR’s 2Q2020 revenue, which was down 15.2 percent year-on-year to $39 million. Importantly, freight transportation, the largest revenue category, was down by a marginal 1.6 percent year-on-year to $53.2 million in 1H2020 as transportation volumes remained strong.
Passenger traffic was the hardest hit segment, down 59.4 percent year-on-year to $1.7 million in 1H2020. Notably, most of the decline occurred during 2Q2020, as passenger transportation was stopped by the government during March-June 2020 due to COVID-19 (revenue plummeted to below $0.2 million in 2Q2020 vs. $2.4 million in 2Q2019).
Freight handling, which is the second-largest revenue category for the company, was up 4.5 percent year-on-year to $11.6 million in 1H2020, however, the growth was entirely stemming from strong performance in the first quarter, when revenue more than doubled (to $6.2 million).
Freight handling revenue dropped 31.5 percent year-on-year in 2Q2020. The freight car rental revenue category also experienced a sharp decline in 2Q2020 (- 63.2 percent year-on-year). On a positive note, logistics service revenue increased in both quarters of the year, with the revenue up 12.2 percent year-on-year to $9.5 million in 1H2020.
Freight transportation, which made up by 66 percent of 1H2020 revenue declined slightly, down 1.6 percent year-on-year to $53.2 million in 1H2020. However, this decline reflected reduced revenue per ton (due to changes in transportation and production mix), as transportation volumes went up 7.6 percent year-on-year in 1H2020, entirely driven by dry cargo transportation volumes.
As reported, transportation volumes going through Georgia have mostly been unaffected by the pandemic related disruptions in global supply chains and reduced trade volumes among regional countries. In 8M2020, GR transported 7.2 million tons of cargo, which is 4.6 percent higher y/y, mostly driven by increased dry cargo transportation (+ 6.8 percent year-on-year). Chemicals/fertilizers and ferrous metals, which together accounted for 15 percent of total dry cargo, were the driving force behind the growth, while sugar, grain, non-ferrous metals, and oil products transportation declined in 8M2020.
Due to lari’s significant - 6.5 percent depreciation during the first half of 2020, GR recognized a large FX loss ($28 million), which dragged the company’s bottom line to a negative $10 million in 1H2020, slightly less than the net loss incurred during 1H2019 (-$15 million).
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