Railway cargo transportation came under significant pressure in 3Q20, while overall transportation volumes going through Georgia remained on the positive trend. Freight transportation, which is the largest revenue stream for the company, dropped by c. 17% y/y in 3Q20, driven by lower transportation volumes (-7.0% y/y) as well as lower revenues generated per km. Other related segments also declined, while passenger traffic operations remained limited despite opening of the economy in the summer months.
GR generated US$ 118.9mn in revenue (-9.3% y/y) and US$ 54.2mn in adjusted EBITDA in 9M20. Weaker GEL on the one hand and deteriorated profitability on the other were the main reasons behind high leverage, with net debt to EBITDA standing at 6.27x, significantly higher than Eurobond covenant.
The company is actively working with IFIs and international investment banks to secure financing for the upcoming Eurobond maturity..
In November 2020, Fitch affirmed GR’s Long-Term rating at ‘BB-‘ with Negative Outlook. Ties with the state and financial implications of default were assessed strong, resulting in one-notch differential between the ratings of Government and GR.
Please see the full report for detailed coverage of Georgian Railway’s 9M20 performance.
