The international transport and logistics company Operail, which has lost over half of its freight volumes due to the Russian invasion of Ukraine, reported a loss of 1.6 million euros in the first half of the year. In the previous year, the company earned a profit of 2.6 million euros during the same period.
According to the unaudited consolidated interim report for the first half of 2022, Operail’s operating income declined from 37 million euros to 30 million euros compared to the same period last year.
According to Chairman of the Operail Management Board, Raul Toomsalu, the situation is difficult, but every effort is being made to rectify the situation. “In the first half of the year, the Group’s freight volume in Estonia and Finland combined was 4 million tons, which is 43% less compared to the same period last year. Essentially, this is due to the disruption of the transit trade of Russian fertilisers and Belarusian oil products caused by sanctions imposed over the war in Ukraine. At the same time, we are glad to see that multimodal transport volume in TEU was 43% higher compared to the same period last year. We are now working towards finding a replacement to the sanctioned volumes and increasing the efficiency of our activities,” said Toomsalu.
Operail’s wagon rental business area has helped the company to cope better with the complicated situation. The Group’s income from wagon rental activities has been 2% higher compared to the same period in the previous year. The company is working towards keeping the wagons away from high-risk regions.
Toomsalu confirmed that Operail does not have any direct or indirect Russian or Belarusian clients, and all wagons have been rented to European companies. The largest number of wagons, approximately 30 per cent, have been rented by Estonian clients. This is followed by Lithuanian clients with almost 30%, Ukrainian clients with 20 per cent, and German clients with about 15 per cent.
In addition to Estonia, Operail wagons also operate in Latvia, Lithuania, Finland, Ukraine, Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan, Mongolia and China. Due to geographical reasons, some wagons are temporarily located in Russia, as wagons are used to transport goods internationally from one country to another.
As for the near future, further sanctions that will be imposed on freight transport volumes in the second half of the year will have an even greater impact, and the year will likely end with a loss. “We will certainly be able to partially resume freight volumes and operate more efficiently, and in cooperation with our Ukrainian colleagues, the Baltic countries and Poland, we are looking for ways to contribute to exporting grain from Ukraine,“ Toomsalu says, highlighting options that could be realised in the second half of the year.
Operail is an Estonian state-owned railway company whose main lines of business are freight transport, locomotive and wagon repair and construction, and rolling stock rental. The company employs 500 people. In addition to the parent company (AS Operail), the Operail Group also includes the rolling stock maintenance and repair company Operail Repairs OÜ, the wagon rental companies AS Operail Leasing and Operail Leasing Finland Oy, and the Finnish railway transport company Operail Finland Oy.