Czech Railways, the state-owned rail transport operator, has reported a gross profit of CZK 396m ($18m) for 2021, marking the end of two consecutive years of losses. The group had posted a loss of almost CZK 2.2bn in the previous year. While the freight transport segment of the business posted a pre-tax profit of CZK 310m, down by CZK 78m year on year, the passenger transport segment suffered losses of CZK 128m. The group’s performance was aided by a rebound in passenger numbers following the Covid-19 pandemic, as the company transported 157 million customers in 2021, up 36 million from the previous year.
The results show that the return of passengers to trains following the pandemic was the primary factor in Czech Railways’ move towards a balanced financial position. The company’s management noted that this return was essential after two years of losses due to the pandemic and a sharp increase in input prices. The CEO of Czech Railways, Michal Krapinec, stated that the company was now targeting a profit of at least a few hundred million Czech korunas for 2022, both for the group and its passenger transport division.
Although the performance of the freight transport segment was positive, with revenue up more than CZK 1bn years on year, the company noted that it had been negatively affected by rising costs, remarkably the price of energy. Meanwhile, Czech Railways Cargo, the company’s subsidiary, increased its revenue in the Czech Republic and abroad in 2021, with revenue from freight transport in the country rising to CZK 5.1bn, up by over CZK 1bn from the previous year. The company also posted revenue of CZK 8.1bn from freight transport abroad, up CZK 700m from 2020.
In addition to the financial results, Czech Railways announced that it would focus on the renewal and modernization of its fleet in 2022 to improve the quality of its services and reduce operational costs. The company aims to purchase new trains and locomotives, and modernize existing ones, focusing on increasing capacity and reducing fuel consumption. The investment will also include purchasing new IT systems to enhance passenger information and improve travel experience.
Despite the improved financial performance in 2021, Czech Railways is still facing challenges, including increased competition from private rail operators and the need to balance investment in its fleet renewal with the need to maintain profitability. The company’s management will need to continue to focus on improving efficiency and increasing revenue to maintain a positive financial outlook in the long term.