The Estonian railway concern is at zero
# Market News
In the first half of 2023, the freight turnover of the concern of Estonian railway enterprises Operail amounted to 1.1 million tons, which is 83% less than in the same period of 2022. Then the cargo turnover of Operail reached 3.6 million tons. In January-June 2021, the concern processed 6.6 million tons. According to the company, the reason for the sharp drop in cargo turnover was the sanctions imposed on Russia, the owner's decision to stop transporting non-sanctioned goods from Russia and Belarus from 2023, and the geopolitical situation in the world as a whole.
The group's profit before deduction of interest, taxes, depreciation and amortization expenses for the first half of the year amounted to 200 thousand euros, and a net loss of 3.1 million euros.
Operail notes that in order to adapt to the new situation, the number of employees of the concern has been reduced by half. "But it is still not possible to reduce the number of employees in proportion to the decrease in traffic volume. The reduction on such a scale was a very difficult process, because we are dealing with people with special knowledge about the railway sector. It is important to preserve the competence of specialized knowledge so that in the future it will be possible to restore volumes," R. Toomsalu drew attention to an additional problem.
In addition, at the beginning of the year, Operail exited the freight transportation business in Finland and the car rental business. The company expects that the received sales revenue will allow the concern to cope with the current difficult situation and focus on finding new solutions. "Despite the fact that due to the lost volumes, Operail's current cash flow is almost close to zero at the moment, the concern's position is financially stable. There is a significant buffer left on the account from the sale of assets," R. Toomsalu said.
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