Ukrainian railways anticipating $411 million loss in passenger revenue this year
Photo: Ukrzaliznytsia

While Ukrainian Railways (JSC Ukrzaliznytsia) expects to be profitable overall this year, the company anticipates around a 15 billion hryvnias ($411 million) loss in passenger revenue alone, CEO Yevhen Lyashchenko said in an interview with Forbes.

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"Of course, passenger transportation in general is still unprofitable – by the end of the year we expect approximately minus 15 billion hryvnias ($411 million). But [railways] are also unprofitable in Europe, this is a social function," Lyashchenko explained.

At the same time, passenger transportation is increasing the company's profitability for the first time in many years. Not only international routes, but also some domestic routes are now marginally profitable.

"For example, Intercity trains. We are currently working on the efficiency of laying routes and the costs of their maintenance," said the head of the UZ.

In the first half of the year, Ukrzaliznytsia earned UAH 4.76 billion hryvnias ($131 million) in profit. For the nine months of 2023, there is also a profit, but more time is needed for calculations.

The company received about 800 million hryvnias ($22 million) from trains to and from Poland alone. Now UZ is working on the expansion of passenger connections with EU states.

"Unfortunately, the volumes of transportation did not give as big a plus as we expected, but at least they reached a stable level," Lyashchenko added.

Before the start of the full-scale war, in September 2021, the Ministry of Finance, on the basis of information provided by UZ, predicted that the company would be unprofitable until 2024  It was assumed that the total amount of losses for 2021-2024 will amount to 5 billion hryvnias ($185 million).

In 2022, Ukrzaliznytsia recorded 10.8 billion hryvnias ($296 million) in losses. At the beginning of the year, it was expected that in 2023 they would double to 20.2 billion hryvnias ($554 million).

From July 1, 2023, Ukrzaliznytsia increased the salaries of employees for the first time since the beginning of the full-scale war.