{"id":4950,"date":"2023-10-31T06:00:09","date_gmt":"2023-10-31T04:00:09","guid":{"rendered":"https:\/\/operail.com\/?p=4950"},"modified":"2023-10-30T22:37:13","modified_gmt":"2023-10-30T20:37:13","slug":"operaili-kulude-taiendav-vahendamine-ohustaks-raudteeveovoimekust-eestis","status":"publish","type":"post","link":"https:\/\/operail.com\/en\/press-releases\/operaili-kulude-taiendav-vahendamine-ohustaks-raudteeveovoimekust-eestis\/","title":{"rendered":"Further cost reduction for Operail would jeopardise rail transport capacity in Estonia"},"content":{"rendered":"

The railway company Operail has reduced operating costs as much as possible, but continued to operate at a loss in the third quarter.<\/strong> To turn the company profitable, the management board is looking for ways to expand the business into foreign markets. However, to ensure the sustainability of rail transport in Estonia, cross-sectoral cooperation and political guidance are needed.<\/strong><\/p>\n

In the first nine months of 2023, Operail transported 1.5 million tonnes of goods in Estonia, which is 68% less than in the same period last year. The operating income of Operail from freight transport was 16.9 million euros in the first 9 months \u2013 43% less than in the same period last year. \u201cFreight volumes in tonnes have decreased more than revenues \u2013 we have done our best to maximise revenues in difficult circumstances,\u201d said Raul Toomsalu, Chairman of the Management Board of the group.<\/p>\n

While the decline in volumes has been caused by sanctions against Russia and the end of non-sanctioned Russian freight, the problem now is the high cost price of rail transport in Estonia compared to both domestic road transport and rail transport in neighbouring countries. \u201cFor example, there was no multimodal transport of Estonian grain this autumn because the harvest was small and it was transported by trucks,\u201d Toomsalu explained.<\/p>\n

Operail’s consolidated nine-month EBITDA was 0.2 million euros and its net loss 3.3 million euros, which was in line with the forecast.<\/p>\n

Operail has significantly reduced its cost base to adapt to difficult circumstances. The group has laid off half of its workforce. \u201cWe have abolished night shifts at stations, stopped servicing smaller stations, closed down local maintenance stations and replaced them with mobile repair and maintenance teams, retrained staff to perform the tasks of several existing positions \u2013 for example, merging the roles of wagon inspector and locomotive driver\u2019s assistant,\u201d Toomsalu gave examples.<\/p>\n

\u201cConsidering the owner\u2019s expectations for Operail, which include maintaining the transport capacity on the Estonian railway infrastructure, it is no longer possible to significantly reduce the company\u2019s cost base,\u201d Raul Toomsalu stated. \u201cWe have reached the point where further cuts would jeopardise safety and Estonia\u2019s ability to respond quickly in emergencies.\u201d<\/p>\n

To turn the company profitable again, it is therefore necessary to increase the revenue base. Operail plans to invest the proceeds from the sale of assets at the beginning of the year in strategic expansion. \u201cWe are looking beyond Estonia,\u201d Toomsalu assured.<\/p>\n

However, in order to establish economic sustainability for Estonian rail freight transport, the most environmentally friendly and safest form of land transport, cross-sectoral cooperation is needed to make rail transport processes more efficient, and political pressure is needed to shift freight from road to rail.<\/p>\n

Operail is an Estonian state-owned railway company that specialises in freight transport, as well as the maintenance, repair and construction of rolling stock in Estonia. The company employs around 250 people. Until the beginning of 2023, Operail also provided international wagon rental and freight transport services in Finland. Following the owner\u2019s directive, Operail exited these business directions.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The railway company Operail has reduced operating costs as much as possible, but continued to operate at a loss in the third quarter. To turn the company profitable, the management board is looking for ways to expand the business into foreign markets. However, to ensure the sustainability of rail transport in Estonia, cross-sectoral cooperation and […]<\/p>\n","protected":false},"author":2,"featured_media":4960,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[63],"tags":[],"class_list":["post-4950","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-press-releases"],"acf":[],"yoast_head":"\nFurther cost reduction for Operail would jeopardise rail transport capacity in Estonia - Operail<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/operail.com\/en\/press-releases\/operaili-kulude-taiendav-vahendamine-ohustaks-raudteeveovoimekust-eestis\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Further cost reduction for Operail would jeopardise rail transport capacity in Estonia - Operail\" \/>\n<meta property=\"og:description\" content=\"The railway company Operail has reduced operating costs as much as possible, but continued to operate at a loss in the third quarter. 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