William Malcolm

Czech Railways Lost 217 Million Crowns In First Half Of 2021

The Czech Railways Group lost 217 million crowns in the first half of this year. Year on year, despite the coronavirus pandemic and the associated reduction in improvements of almost 1.8 billion crowns. Almost all of the group’s subsidiaries ended the first half of the year with a profit. Only passenger transport was in the loss of 580 million crowns due to reduced mobility, but it improved by 1.3 billion crowns year on year. 50.3 million passengers traveled on ČD trains, down 9.5 million year-on-year. The head of Czech Railways, Ivan Bednárik, told the press. For the whole of last year, the group made a loss of 4.1 billion crowns due to the crisis.

This year, the crisis has mainly affected passenger transport. During the spring closure of the districts, on average about a tenth of the normal number of passengers ran on ČD trains. The average transport distance decreased by about three kilometers to 40 kilometers. Revenues from passenger transport then fell by more than 12 percent to 2.42 billion crowns.

“Nevertheless, we managed to significantly improve the management of passenger transport. The drop in revenues was largely offset by effective cost management. We save in all areas, be it personnel costs, operating expenses, marketing and other activities,” said Bednárik. Bednárik stated that the company implemented over 20 measures aimed at better utilization of synergies within the group, which saved the company around 900 million crowns in the costs of the parent company in the first half of the year.

“At the moment we have an approved long-term strategy, Moody’s has confirmed our Baa2 rating with a stable outlook, we continue to invest in vehicle renewal, service development or repair. We plan investments of about 120 billion crowns in the next ten years. Most of these funds will go into the purchase of new modern vehicles, so Czech Railways and the entire ČD Group are stabilized and have a clear strategy for further development, “added Bednárik.

On the other hand, the loss from last year was erased by the freight carrier ČD Cargo. The company earned 247 million crowns in the first half of the year, which is a year-on-year improvement of almost 300 million. The carrier transported 2.1 million tons more goods year-on-year, ie a total of 31.1 million tons, and increased its performance in most of the key commodities. “Once again, it was confirmed that entering foreign markets was the right step, as ČD Cargo’s business activities in Austria, Germany, Poland, Slovakia and Hungary also made a significant contribution to achieving consolidated profit. We continue this trend and establish another subsidiary. ČD Cargo Adria, which should soon start using the potential of the transport market in Croatia and Serbia, “said the head of ČD Cargo Tomáš Tóth.

This year, Czech Railways also strengthened its liquidity with framework loans with three banks in the amount of CZK 8.5 billion. Further funding for train investments should be provided by the forthcoming partnership with the National Development Bank.

The Czech Railways group consists of passenger carriers and ČD Cargo freight. The group also includes the Railway Research Institute, a provider of ČD Telematika data services or a provider of ČD Information Systems ICT services. The group employs around 23,500 people.