Ukrainian state railway company’s financial plan for 2024 sees $350m loss ahead

Ukrainian government OKs Ukrzaliznytsia financial plan for 2024 with UAH 12.6 billion ($350 million) loss
Ukrainian government OKs Ukrzaliznytsia financial plan for 2024 with UAH 12.6 billion ($350 million) loss

The Ukrainian government has approved the financial plan of Ukrzaliznytsia for 2024, which foresees the state railway company making a loss of UAH 12.6 billion ($350 million), MP Oleksii Honcharenko wrote on his Telegram channel on Nov. 17.

In 2024, Ukrzaliznytsia's net income will amount to UAH 98.6 billion ($2.7 billion), and total income will be UAH 103.2 billion ($2.9 billion).

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"The Cabinet of Ministers has approved the consolidated financial plan of Ukrzaliznytsia for 2024," Honcharenko wrote in his post.

“The key figures are as follows: net income — UAH 98.6 billion ($2.7 billion), total income — UAH 103.2 billion ($2.9 billion), loss — UAH 12.6 billion ($350 million).”

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According to news agency Interfax-Ukraine, citing sources close to Ukrzaliznytsia, the draft financial plan initially envisaged a loss of UAH 13 billion ($361 million). In 2024, Ukrzaliznytsia's expenditure side is expected to increase due to the exchange rate difference, which, according to the forecast of the Ministry of Finance at the rate of UAH 40.2/$1, will amount to UAH 5.28 billion ($147 million). In the financial plan for 2023, the exchange rate difference was estimated at UAH 6.7 billion ($186 million).

Ukrzaliznytsia 's expenses will increase in 2024 due to rising prices for electricity, diesel fuel, and natural gas. An increase in the company’s payroll will also contribute to the cost growth.

Following government approval of the deficit-laden financial plan, Ukrzaliznytsia is expected to propose measures to balance its budget, such as raising freight rates in line with inflation.

Ukrzaliznytsia's financial plan for 2023 envisaged a loss of UAH 20.2 billion ($561 million), up from a net loss of UAH 10.8 billion ($300 million) in 2022. However, due to cost optimization, the company managed to make a small profit, the amount of which was not disclosed.

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