The financial performance of PKP Cargo has taken an expected turn for the worse in the first half of 2024. The Polish state rail freight operator in restructuring registered negative results all across the board, including significant impairment of assets.
The company’s EBITDA for H1 2024 amounted to 161,8 million Polish złoty (37,8 million euros), down from 503,6 million złoty (117,5 million euros) during the same period of the previous year. However, EBITDA picked up a little bit in the second quarter, with 85,3 million złoty (19,9 million euros) compared to 76,5 złoty (17,9 million euros) in the first quarter of the year.
PKP Cargo’s net profit took a significant hit in H1. With a loss of 402,7 million złoty (94 million euros), the company is sure to remember the same period of 2023 better, when it recorded a net profit of 105,2 million złoty (24,5 million euros).
Tough time for PKP Cargo and the market
PKP Cargo explains the negative financial results by the loss of revenue from contracts with customers. The company transported a total volume 18,3 per cent less than in H1 2023. It also points out that the market as a whole had a tough time.
“In H1 2024, rail operators transported a total of 110,7 million tonnes of freight and performed freight work equal to 29,3 billion tonne-kilometres, which translated into a 4 per cent year-on-year decrease in market freight volume (-4,6 million tonnes) and a 4,8 per cent year-on-year decrease in realised freight work (-1,5 billion tonne-kilometres).” The company refers to the war in Ukraine and high energy prices as culprits for the difficult economic situation.
Besides operating results, PKP Cargo conducted an impairment of assets test in order to make up the balance sheet amid restructuring proceedings. By the end of the first half of the year, PKP Cargo had registered an impairment loss equivalent to 41,8 million euros, reducing the value of its assets significantly.
Positive financial results only after November
The PKP Cargo Group as a whole, which includes the freight operator’s subsidiaries, registered a half yearly EBITDA of 237 million złoty, down by 61,2 per cent compared to the same period last year.
PKP Cargo applied for restructuring proceedings at a Polish court only on 27 June. Officially, the company has been in restructuring since late July. Earlier, the company stated that positive results from the restructuring efforts can only be expected from November onwards.