GR released poor FY17 audited results. On the back of the continued decline in freight traffic volumes, the top line decreased 6.8% y/y to US$ 173.2mn, from an already low base.
Decrease in freight transportation revenue, down 15.3% y/y, was the main reason behind the decline. Freight handling and other revenue categories declined 10.6% y/y to US$ 20.0mn and 21.3% y/y to US$ 3.3mn, respectively. On the positive note, logistic service and freight car rental revenue, which account for 20.8% of total, were up 32.4% y/y to US$ 29.4mn and 13.5% y/y to US$ 6.7mn, respectively. Passenger traffic category increased for the second consecutive year with FY17 revenue up 19.7% y/y to US$ 9.1mn. In 1H18, the downward trend reversed with revenues increasing 3.9% y/y to US$ 80.4mn helped by the increased freight car rental and logistic service revenue categories.US$ 152.5mn impairment loss was recognized on Tbilisi Bypass Project reflecting ambiguity on the project. Considering the significant uncertainties related to the future of the project and the associated potential economic benefits, the carrying value of the project (GEL 397.3mn) was written down to its recoverable amount (GEL 14.7mn). This resulted in GEL 382.6mn or US$ 152.5mn impairment loss recognition, hitting the bottom line, which came in at US$ -141.2mn.