Freight company Operail reports €1.6 million loss due to Russian sanctions
State-owned freight company Operail posted losses of €1.6 million for the first half of 2022 due to loss of trade due to Russian sanctions. Last year, the company made a profit of €2.6 million during the first six months.
Operail's operating income declined from €37 million to €30 million compared to the same period last year, according to the unaudited consolidated interim report.
Management Board Chairman Raul Toomsalu said 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," he said.
The firm's rental wagon business has helped and activities are 2 percent higher than in 2021.
Toomsalu said Operail does not have any direct or indirect Russian or Belarusian clients, and all wagons have been rented to European companies, mostly Estonian, Lithuanian and German.
However, 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, the company said.
Sanctions imposed in the second half of 2022 will have an even bigger impact on the company and further losses are expected.
It is hoped there will be opportunities to increase freight volumes by cooperating with Poland and the Baltics to ship Ukrainian grain, Toomsalu said.
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Editor: Helen Wright