William Malcolm

Czech Railways Reports CZK 4 Billion Annual Loss

Last year, the Czech Railways Group lost 4.1 billion crowns, mainly due to the coronavirus crisis. In the previous five years, the railways made a profit. In 2019 it amounted to 1.3 billion crowns. The most significant drop in sales last year affected passenger transport, where the number of passengers fell by a third to almost 118 million. However, freight transport and other subsidiaries in the group also ended up in a loss. This was announced today by Czech Railways.

The biggest problem was the railways last year in passenger transport, for example in the spring the carrier’s trains ran only a tenth of the usual number of passengers and well below the regular part of the year. “Nevertheless, we have always provided basic transport services for citizens, and the costs associated with this have not been fully covered by sales. This is the main reason why passenger transport ended in a loss of almost four billion crowns,” said the head of Czech Railways, Ivan Bednárik.

Last year, freight transport provided by ČD Cargo in the group was also loss-making. Last year, it recorded a loss of 248 million crowns, while in previous years, the company played a crucial role in the profit of the entire group. The most significant declines were in the transport of solid fuels, metallurgy. In contrast, the opposite development was recorded in orders for the transport of wood and paper products, construction, and the transport of food and agricultural products.

“Despite the pandemic, we also continued to successfully expand in foreign markets, where we were particularly successful in Austria and Germany. Thanks to this and due to austerity measures, we partially rehabilitated the loss of revenue,” said ČD Cargo chief Tomáš Tóth.

Other subsidiaries of Czech Railways, such as ČD Travel or the Transport Training Institute, also ended up in a loss.

The coronavirus crisis will affect the company’s operations this year as well, and passenger demand is still significantly reduced by a pandemic. Railways have stated in recent months that they are trying to at least partially mitigate losses by cutting costs, in addition to using government support programs Antivirus, for example. At the same time, the group continues with austerity measures and changes this year as well. Recently, the company opened seven-year framework loans for up to 8.5 billion crowns. He will draw on them if necessary, while he can use them for any purpose, but he wants to use them as a priority to purchase new trains. The company wanted to strengthen its current liquidity by arranging loans. The company also plans to buy almost a third of the PPF Group from the telecommunications company ČD Telematika, in which the carrier now holds over 70 percent.

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.