In 2023, GR maintained a positive revenue trend, growing 3.1% y/y to US$ 238.7mn, slightly below our projected growth of 4.7% y/y. Although revenue from freight traffic, the primary source of income, declined due to a decrease in transported cargo volume, higher earnings from logistics services, freight car rentals, and passenger services drove overall growth. The 8.3% y/y decline in cargo volume was largely attributed to the high base established in 2022 (14.8mn tons), which was boosted by one-time surge in certain cargo traffic, particularly in sugar, chemicals, and fertilizers, following the Russian-Ukrainian war.
Modest revenue growth, coupled with an inflation-driven rise in operating expenses (+26.6% y/y to US$ 205.0mn) suppressed company’s Adjusted EBITDA by 34.2% y/y to US$ 64.1mn in 2023, lowering the Adjusted EBITDA margin to 26.9%. This drop caused a deterioration in the net debt to Adjusted EBITDA ratio, which rose to 6.5x in 2023 from 3.9x in 2022, exceeding the historical average of 5.9x over 2018-21.
We expect slight revenue growth by 0.8% y/y to US$ 240.5mn in 2024.
