Despite growing volumes and new records set, Ukrainian Railways has registered its first negative monthly balance of 2024 in July. The company blames energy costs, exchange rates and a different freight structure for the disappointing figures.

Ukrainian Railways succeeded in covering the 40 per cent increase in energy costs by saving on other expenses, it says in a Telegram post. However, unfavourable exchange rates and changes in the makeup of transported freight pushed the company’s finances over the edge.

The volume of unprofitable freight has increased, says the company. In July 2024, 3,6 million tonnes of iron and manganese ore were transported, which is 65 per cent more than in July 2023. However, the volume of (the much more profitable) grain transportation declined by 19 per cent.

The company transported 13,6 million tonnes of freight in July, which constitutes a growth of 12 per cent compared to the same month last year. Domestic traffic accounted for 6,4 million tonnes, a decrease of 22 per cent. Exports amounted to 6,4 million tonnes as well, almost doubling with a 93 per cent growth. Imports increased by 39 per cent and totalled 746 thousand tonnes.

Facing bankruptcy

In the same post, Ukrainian Railways calls for the removal of freight tariff classes, arguing that “the costs for infrastructure maintenance is the same for all goods.”

The company happens to be facing potential financial problems as a Kyiv court annulled a 2021 tariff hike for one of such classes, which covers mostly raw materials. The annulment could lower tariffs for that category significantly and create a dent in the Ukrainian Railways’ finances. According to the company, it could face bankruptcy due to the decision.

While the company is appealing the court’s decision, it makes sure to highlight that it “must remain a profitable company in order to secure the country’s economy and support its defence capability” in wartime.