The results of the Operail Group, which entered a new market in 2020 and began providing freight transport services in Finland under difficult circumstances, were better than expected – despite the uncertain situation, the company was able to show a net profit of almost three million euros and expand its wagon rental business.
Compared to the record-breaking 2019, the commercial revenue of the company decreased by 14%, reaching 65.1 million euros. EBITDA dropped 13% to 14.8 million euros and the net profit of the company was 2.7 million euros, compared to 9.6 million euros in 2019.
“The lower turnover was mostly brought on by the decrease in freight volumes, which started already in the last quarter of 2019. The coronavirus obviously affected us as well, but we expected worse,” said Raul Toomsalu, Chairman of the Board of Operail. “Despite the significant pressure on the rental prices of wagons in the 1,520 mm gauge railway network, we increased and expanded our wagon business by almost two million euros.”
In 2020, Operail rented more than 2,000 wagons and the profits of the rental business reached 14.7 million euros, increasing by 14% compared to 2019. Freight volumes decreased by 15% in 2020, reaching 11.2 million tonnes. Due to this decrease, the profits from freight transport were also lower – 36.8 million euros or 17% lower than in 2019. “In 2020, the majority of the volume was made up of fertilisers – we transported 6.4 million tonnes of those, which means a 5% increase. Of the total freight volume, the proportion of transit was 78% or 8.8 million tonnes.”
As the key activities of last year, the chairman of the board of Operail highlights increasing efficiency through reorganising activities, expanding to new markets, and searching for environmentally friendly solutions. “We have made freight transport processes more efficient, so the profit per employee has increased,” said Toomsalu. “This was not a step taken because of the coronavirus crisis, but the implementation of our long-term strategy. In addition, despite the difficult situation, we were able to expand our business and started to provide railway transport services on a new market – in November 2020, we launched freight transport services on the Finnish railway. As it stands, we have signed several important contracts that promise annual volumes of millions of tonnes,” commented Toomsalu. “We also keep looking for solutions that would allow us to decrease the environmental impact of the transportation sector. We will continue with innovation projects that allow us to bring the emissions of our locomotives to zero,” said the chairman of the board of Operail.
Operail is an international transport and logistics company whose main lines of business are freight transport, repair and construction of locomotives, and rolling stock rental. The company employs almost 600 people in Estonia and Finland. In addition to the parent company (AS Operail), the Operail Group also includes wagon rental companies AS Operail Leasing and Operail Leasing Finland Oy and Finnish railway transport company Operail Finland Oy.