Ukrainian Railways expects its proceeds from freight transportation to fall by 3-4 times in 2025

MOSCOW. Feb 25 (Interfax) - JSC Ukrainian Railways (Ukrzaliznytsia) expects to see a threefold-fourfold decrease in its proceeds from freight transportation to UAH 5 billion-6 billion in 2025 if freight tariffs remain unchanged, the company's CEO Alexander Pertsovsky said.

"The profitability of cargo transportation services has started to decline considerably. In 2025, it is expected to fall to around UAH 5 billion-6 billion, which will not allow us to offset losses from passenger [transportation] services at all," Ukrainian media quoted Pertsovsky as saying in an interview with Fedoriv Vlog.

Ukrainian Railways reported operating profit from cargo shipping services of "UAH 20 billion give or take" in 2023, he said.

According to its financial plan for 2025, the company expects to see losses from its passenger transportation services at UAH 22 billion, he said.

"According to our financial plan for 2025 which we have today, passenger transportation will generate around UAH 22 billion losses, which will be split almost evenly between long-distance and suburban train services. International routes, a profitable segment, will generate approximately UAH 1.7 billion [in 2025]," Pertsovsky said.

Ukrainian Railways' transportation of coal and fuel has also decreased, so has the transportation of grain and metal products, Pertsovsky said. Since tariffs are yet to be harmonized, Ukrainian Railways continues to be affected as it transports mostly low-cost categories of cargo, he said.

An increase in electricity prices for industrial consumers has put a further strain on the company, he said.

"The price caps were raised from mid-2024. It means an additional UAH 6 billion," Pertsovsky said.

As reported, transportation by Ukrainian Railways dropped 0.9% to 14 million tonnes in January 2025 year-on-year. It also edged down 0.2% month-on-month.

In January-June 2024, the company's revenue grew 19.51% year-on-year to UAH 53.9 billion, while its profit fell 33.2% to UAH 3.17 billion.

Ukrainian Railways drew up a proposal to raise freight tariffs by 37% in 2025 and forwarded it to the Ministry of Communities and Territories Development, which is now reviewing the company's materials and holding consultations with business.