You're reading: Ukrzaliznytsia reports Hr 303 million net income for 2016 amid inefficiency concerns

Ukraine’s state railway company Ukrzaliznytsia, under fire from critics for a lack of efficiency, has reported that it hit its expected financial target for 2016 of Hr 303 million ($12 million) in net income.

The company recorded revenues of Hr 78.9 billion ($3.08 billion) while its expenditures totalled Hr 78.6 billion ($3.07 billion). Wojciech Balczun, the company’s CEO, said the figures came in as management had planned.

He added that Ukrzaliznytsia has fully complied with its obligations to the state, paying Hr 15 billion ($586 million) in taxes and mandatory payments.

A further Hr 6.8 billion ($266 million) was paid to the state budget and Hr 8.2 billion ($320 million) to other recipients, including local budgets.

The company cut its transportation expenditures by 2.8 percent or by Hr 1.7 billion ($65 million).

It recorded a reduction in fuel costs of Hr 1.3 billion ($51 million), resulting from lower diesel fuel prices.

The company carried 343.4 million tons of cargo and 439 million passengers in 2016, generating revenues of Hr 62 billion ($4.2 billion).

It also reported that more than 7,200 locomotives, 30,000 freight cars and 2,000 passenger cars have been repaired, with a further 1,020 new cars purchased in 2016.

The announcement of the results follows concerns raised by Transport and Infrastructure Minister Volodymyr Omelyan, as well as other companies, regarding the effectiveness of the company’s new management.

The ministry has called for a report of the company’s management after fielding concerns over its operations.

The company also came under fire last year from groups, including grain traders, for its poor transportation of goods, with industry workers claiming cargo was lost during transportation by dilapidated carriages, Ukraine Today reported.

According to the report, in November 2016, less than 10,000 freight carriages remained operational.

Empire State Capital senior analyst Tantely Ratovohery said they believe the company’s statement comes as a response to criticism of the new management.

However, he said the company’s results appear to be positive, “especially considering that the new management team has been working roughly half-year, while the company had to handle the debt burden inherited from the previous management and the asset losses from the eastern Ukrainian conflict, against an adverse operating environment.”

Meanwhile, the multimedia platform Ukrinform reported that Ukrzaliznytsia is seeking to expand its network, with plans to launch new routes between Ukraine and Poland, and to Hungary and Slovakia.

Omelyan told Espresso.TV Channel that European destinations would in future be a priority for the railway company, after decades of the primary destinations being in Russia.