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Government to provide over €30 million to cover Estonian Railways' 2024 losses

Oil train on Eesti Raudtee tracks.
Oil train on Eesti Raudtee tracks. Source: Siim Lõvi /ERR

The government plans to grant €31.7 million to cover losses incurred by state-owned railtrack operator Estonian Railways (Eesti Raudtee).

The ending of freight rail transit to and from Russia is one of the factors to have hit the company's revenues hard; in total, €168.2 million has been earmarked to cover the rail operator's losses for 2023-2027.

The state does not expect Estonian Railways to turn a profit in the next few years either, again due to the fall in freight volumes; the passenger transport service operated by Elron itself is in effect also being subsidized by the state.

Last year, the Ministry of Climate provided nearly as much as is planned for this year, at €25.9 million, to shore up Estonian Railway's losses.

The last year that the company was in the black was 2022, when it earned €280,000 in operating profit, off €59 million in revenue.

Taking into consideration the logic of Estonian Railway's revenue calculations, its declared Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) equates to the sum of its depreciation and net financial expenditure. These rose by 5.5 and 5.6 percent respectively compared with 2021's figures; the company has not been earning a net profit based on this accounting methodology.

As of the end of 2022, AS Eesti Raudtee held assets worth €417.38 million, 83 percent of which were fixed assets.

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Editor: Andrew Whyte, Barbara Oja

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