State-owned Czech Railways has announced a gross profit of CZK 396m ($18m) for 2021, reversing two years of consecutive losses. While the passenger transport segment suffered a loss of CZK 128m, the group’s pre-tax profit for freight transport stood at CZK 310m, down by CZK 78m year on year. The company’s performance was boosted by a rebound in passenger numbers following the Covid-19 pandemic, with 157 million customers transported in 2021, up by 36 million from the previous year. The CEO of Czech Railways, Michal Krapinec, stated that the company was targeting a profit of at least a few hundred million Czech korunas for 2022 for the group and its passenger transport division.

The company attributed the improved financial performance to the return of passengers to trains following the pandemic, and management highlighted the importance of this after two years of losses due to the pandemic and a sharp increase in input prices. Despite the improved results, Czech Railways is still facing challenges, including increased competition from private rail operators and the need to balance investment in fleet renewal with the need to maintain profitability.

To address these challenges, Czech Railways has announced that it will focus on renewing and modernizing its fleet in 2022 to improve the quality of its services and reduce operational costs. The company will purchase new trains and locomotives, modernize existing ones, and purchase new IT systems to enhance passenger information and improve travel experience. By increasing capacity and reducing fuel consumption, the company aims to maintain profitability and remain competitive against private rail operators.

The financial results also revealed that Czech Railways Cargo, the company’s subsidiary, increased its revenue in the Czech Republic and abroad in 2021. Revenue from freight transport in the country rose to CZK 5.1bn, up by over CZK 1bn from the previous year, while revenue from freight transport abroad reached CZK 8.1bn, up CZK 700m from 2020.

In conclusion, Czech Railways’ financial results for 2021 highlight the importance of passenger transport and the challenges faced by state-owned rail operators in a competitive market. To remain competitive, the company must balance investment in fleet renewal with the need to maintain profitability, and continue to focus on improving efficiency and increasing revenue.

Article by Prague Forum