Analysis of expenses on transportation activities
Expenses on transportation activities totalled RUB 1,185.6 bln in 2014, a 1.7% increase compared with 2013.
| Indicator | 2013 Actual | 2014 Actual | Change in actual 2014/ actual 2013 | |
|---|---|---|---|---|
| RUB bln | % | |||
| Expenses on transportation activities | 1,165.9 | 1,185.6 | 19.7 | 101.7 |
| Payroll expenses | 385.6 | 380.0 | –5.6 | 98.5 |
| Allocations for social needs | 102.9 | 104.8 | 1.8 | 101.8 |
| Material expenses | 381.7 | 393.0 | 11.2 | 102.9 |
| Materials | 77.7 | 55.0 | –22.7 | 70.8 |
| Fuel | 81.3 | 84.3 | 3.0 | 103.7 |
| including for train traction | 66.2 | 69.6 | 3.5 | 105.3 |
| Electricity | 111.9 | 121.6 | 9.6 | 108.6 |
| including for train traction | 97.3 | 106.4 | 9.1 | 109.4 |
| Other material expenses | 110.9 | 132.2 | 21.3 | 119.2 |
| Depreciation | 180.9 | 188.3 | 7.4 | 104.1 |
| Other expenses | 114.8 | 119.6 | 4.9 | 104.2 |
Payroll expenses totalled RUB 380.0 bln in 2014, a decrease of 1.5%, or RUB 5.6 bln, compared with 2013. The change in expenses was due to the following factors:
- growth in expenses that depend on transportation volume (RUB +5.2 bln);
- growth in expenses due to the partial indexation of wages in accordance with local company regulations prepared based on clause 4.1.5 of the Russian Railways collective bargaining agreement for
2014–2016 (indexation of wages averaged 3.8% in 2014 amidst inflation of 7.8%) (RUB +10.1 bln); - transition to full after-sales service of the Russian Railways locomotive fleet (RUB –11.1 bln);
- a decrease in deductions to the Blagosostoyanie Private Pension Fund (RUB –4.0 bln);
- a decrease in expenses due to optimisation measures such as reducing the amount of major track repairs, layoffs as well as the use of part-time schedules (RUB –5.8 bln).
At the same time, deferred expenses totalled RUB 15.4 bln due to the postponement of indexation to a later time.
Deductions for social needs totalled RUB 104.8 bln, an increase of 1.8% compared with 2013, or RUB 1.8 bln. The change in expenses was caused by the following factors:
- an increase in the amount of additional tariffs for insurance premiums to the Pension Fund of the Russian Federation for certain categories of employees as of 1 January 2014 (RUB +3.6 bln);
- a decrease in expenses due to optimisation measures and the transition of locomotives to full after-sales service, among other factors (RUB –1.8 bln).
Fuel expenses totalled RUB 84.3 bln, an increase of 3.7%, or RUB 3.0 bln, compared with 2013, including:
- Fuel expenses on train traction increased 5.3% (RUB +3.5 bln) with the change in expenses occurring due to:
- growth in transportation volume as measured in gross tkm in diesel traction by 0.6% (RUB +0.4 bln);
- growth in diesel fuel prices taking into account growth in excise taxes for diesel fuel in accordance with Federal Law No.
306-FZ dated 27 November 2010 “On Amendments to Part One and Part Two of the Tax Code of the Russian Federation” (RUB +4.7 bln); - optimisation measures that aim to cut fuel consumption by reducing specific fuel consumption rates for train traction in diesel traction by 2.2% (RUB –1.6 bln);
- Expenses on other production needs decreased 3.4% (RUB –0.5 bln) with the change taking place due to:
- growth in diesel fuel prices taking into account growth in excise taxes for diesel fuel in accordance with Federal Law No.
306-FZ dated 27 November 2010 “On Amendments to Part One and Part Two of the Tax Code of the Russian Federation” (RUB +1.1 bln); - a decrease in fuel consumption due to optimisation measures and the transition of locomotives to full after-sales service (RUB –1.6 bln).
- growth in diesel fuel prices taking into account growth in excise taxes for diesel fuel in accordance with Federal Law No.
Electricity expenses totalled RUB 121.6 bln, an increase of 8.6%, or RUB 9.6 bln, compared with 2013, including:
- Electricity expenses on train traction grew 9.4% (RUB +9.1 bln) with the change in expenses resulting from:
- growth of 4.1% (RUB +4.0 bln) in transportation volume as measured in gross tkm in electric traction;
- growth of 7.0% (RUB +6.9 bln) in the average electricity tariff for train traction;
- optimisation measures that aim to cut electricity consumption by reducing specific electricity consumption rates for train traction in electric traction by 1.5% (RUB –1.8 bln).
- Expenses on other needs increased 3.4% (RUB +0.5 bln) with the change in expenses due to:
- growth of 7.5% (RUB +1.4 bln) in the average electricity tariff;
- a decrease in electricity consumption due to optimisation measures and the transition of locomotives to full after-sales service (RUB –0.9 bln).
All other tangible costs (materials and other material expenses) totalled RUB 187.1 bln, down 0.7%, or RUB 1.4 bln, from the 2013 level. The change in expenses is attributable to the following factors:
- growth in expenses that depend on transportation volume (RUB +3.7 bln);
- growth in expenses due to price increases for products consumed (RUB +11.9 bln);
- ongoing work to curb rising prices for the products consumed generated a positive economic effect (RUB –7.0 bln);
- growth in expenses due to the transition of the Russian Railways locomotive fleet to full after-sales service (due to the reallocation of other cost elements) (RUB +16.3 bln);
- a reduction in the programme for major infrastructure repairs (RUB –26.3 bln) (the decrease in expenses totalled RUB 32.7 bln taking into account other cost elements).
Depreciation amounted to RUB 188.3 bln in 2014, an increase of 4.1% (RUB +7.4 bln) compared with 2013.
The change in expenses resulted from the commissioning of new fixed assets as part of the Russian Railways investment programme as well as the retirement of several assets and ongoing work to mothball fixed assets not involved in the transportation process.
Other expenses totalled RUB 119.6 bln, an increase of 4.2%, or RUB 4.9 bln, compared with 2013. The main factors that influenced the change in other expenses were:
- growth in expenses that depend on transportation volume (RUB +1.9 bln);
- growth in property tax expenses (RUB +4.4 bln) (including RUB 3.4 bln due to changes in legislation to abolish benefits with respect to railway infrastructure);
- growth in expenses to fund a programme to lease advanced track maintenance equipment for a wide range of track repair work in order to ensure the efficient operation of railway infrastructure (RUB +7.2 bln);
- growth in expenses on maintaining and ensuring safe transportation during preparations for the Olympic Games in Sochi (expenses on the maintenance of inspection areas and equipment at transportation infrastructure facilities and railway stations) (RUB +1.5 bln);
- a decrease in expenses by RUB 10.1 bln, including due to the termination of the lease for railcars, the transition of locomotives to full after-sales service, a reduction in the major repairs programme, work to curb rising prices for the products consumed as well as a reduction in administrative and management expenses (general business contracts, travel expenses and communication and exhibition activity expenses, among others).
Railway transportation costs totalled 384.5 kop./10 virtual tkm in 2014, down 2.7% compared with 2013 despite average annual inflation of 7.8% in Russia.
Major repairs of fixed assets. Russian Railways spent almost RUB 51.5 bln on major repairs to fixed assets as operating expenses in 2014. This amount includes subsidies allocated to Russian Railways from the federal budget for major infrastructure repairs in the amount of RUB 26.0 bln.