The Operail wagon business continued with strong growth

The net profit of Operail in the first quarter of 2020 was 1.1 million euros and EBITDA amounted to 3.3 million euros. A year earlier, the net profit was 2.7 million euros and EBITDA 4.3 million euros. The Group’s operating income decreased by 15% compared to the previous year to 16.1 million euros.

“Our results in the first three months were affected by the decrease in freight volume, which began in November last year,” said Raul Toomsalu, Chairman of the Board at Operail. “However, the wagon rental business showed continued strong growth – rental income increased by 30% compared to the previous year and amounted to 3.8 million euros.”

Today, the Operail Group has two subsidiaries in Estonia and Finland focused on the wagon rental business. “We have gradually increased the Group’s wagon fleet, and at the end of the first quarter, we had more than 3,700 wagons, of which more than 2,300 were rented out. Our wagons are used for the transportation of goods between China and Europe,” said Toomsalu. “We do not plan to significantly increase the wagon rental business this year; however, we forecast growth in rental income.”

In the first quarter of 2020, Operail’s freight volume was 2.5 million tons, which is 29% less than in the same period of the previous year. In terms of product groups, compared to the previous year, the transportation of chemical products has increased and the transportation of mineral fuels has decreased. Oil shale transportation is virtually non-existent.

According to Toomsalu, the keywords for Operail in 2020 are environmental protection, new markets, and digitalisation. “We have become much more efficient in recent years and we can see that there is still room for growth. Even though we will not achieve last year’s record results this year, we are investing in offering much more environmentally friendly solutions, commencing freight transport on Finnish railways, and digitising freight transport. This will lay the foundation for even better results in 2021–2024.”

Operail is an Estonian state-owned railway company whose main business areas are freight transport, repair and construction of locomotives and wagons, and rolling stock rental. The company employs almost 650 people. In addition to the parent company (AS Operail), the Operail Group also includes the wagon rental companies AS Operail Leasing and Operail Leasing Finland Oy, and the Finnish railway transport company Operail Finland Oy.