Ukrzaliznytsia reports first losses of the year

Source: Ukrzaliznytsia

Ukrzaliznytsia, Ukraine’s state railway company, has reported financial losses for the first time in 2024. Despite enhancing operational efficiency over the past year, the company’s performance took a downturn in July.

The company blames higher energy prices, hryvnia’s weakening and the ‘worsening structure of cargo’.

The losses though are largely linked to a surge in low-margin cargo, such as iron and manganese ore, which saw a 65% increase compared to July 2023. The revenue from these shipments has failed to cover transportation costs.

In July 2024, Ukrzaliznytsia transported a total of 13.6 million tons of cargo, marking a 12% rise from the previous year. The cargo breakdown was:

• Domestic: 6.4 million tons (-22% year-over-year)
• Export: 6.4 million tons (+93% year-over-year)
• Import: 746,000 tons (+39% year-over-year)

The company is considering aligning transportation costs across different tariff classes as a potential solution. They argue that infrastructure costs are uniform for all cargo types, suggesting that the current cost disparities are economically unjustified.