Its profitability improved primarily because the number of trips made on long-distance trains increased by almost 45 percent from the previous year – exceeding the level before the coronavirus pandemic. In July, 17 percent more trips were made than before the pandemic, and two percent more in August-September.
“The number of long-distance trips rose to a good, pre-pandemic level, primarily due to the increase in leisure travel. In July, we made an all-time record, 1.4 million trips. comment Elisa MarkulaCEO of VR.
However, short-distance traffic has not yet returned to the pre-pandemic level, although the number of trips increased by 50 percent year-on-year in July-September. The number was 13 percent lower than the pre-pandemic level.
The amount of railway freight decreased by about 20 percent from the previous year, when the state-owned company continued to stop traffic to and from Russia. The services had been reduced by about 65 percent by the end of last month, and they are planned to be stopped completely by the end of the year.
Domestic demand is expected to compensate for part of the decrease in volume.
“Demand for all services in domestic freight traffic has grown significantly, which replaces part of the volume of eastern traffic,” said Markula. “Growth has been accelerated especially by the increase in domestic transport volumes of round wood.”
VR emphasized that changes in energy prices do not have a major impact on the profitability of its domestic freight services, as they are offered under contracts that stipulate that energy prices are taken into account in the service prices.
However, Russia’s attack on Ukraine and global political uncertainty continue to affect the railway company’s operations and profitability. Prolonging the war can slow down economic growth, raise energy prices and accelerate inflation.
Although exceptionally high electricity prices are expected to have a negative impact on the profitability of passenger traffic in the last quarter of the year, the company reminded that in the longer term its business will be boosted by the megatrends of urbanization and growing environmental awareness.
VR also revealed on Monday that it has decided to supplement its short-distance fleet with 20 electric locomotives from Switzerland’s Stadler Bussnaug. The purchase of 250 million euros includes the option to buy another 50 electric locomotives and maintenance services.
Aleksi Teivainen – HT
Source: The Nordic Page