Ukrainian Railways reports Q1 loss of US$178m: what were the contributing factors?
Ukrzaliznytsia (Ukrainian Railways) has reported a loss of about UAH 7.9 billion (US$178 million) for the first quarter of 2026 due to constant Russian attacks on infrastructure and soaring energy prices.
Source: Ukrzaliznytsia on Telegram
Quote: "Multiple enemy attacks, a reduction in transportation volumes caused by freight shippers' irregular operations and a hike in energy prices had a massive impact on Ukrzaliznytsia's financial performance in Q1 2026, but the company endured and kept going."
Details: Ukrzaliznytsia said the first quarter of 2026 was a challenge. Russian forces carried out 541 attacks on railway infrastructure and rolling stock, equivalent to half of all attacks recorded in 2025.
As a result, 1,718 railway facilities were damaged. Twenty-eight railway workers, including train drivers, track workers, power engineers and carriage maintenance staff, were injured in the course of their work.
Quote: "These regular Russian attacks on infrastructure and the sharp rise in energy prices had an adverse effect on the company's performance, resulting in a loss of approximately UAH 7.9 billion."
Details: Despite these challenges, passenger fares were frozen to keep transport affordable for everyone. Freight tariffs were also left unchanged to support domestic businesses and the wider economy during a difficult period, Ukrzaliznytsia said.
The Russians also stepped up their attacks on port infrastructure, industrial companies and rolling stock, including locomotives used to deliver raw materials and transport finished products from production facilities. Disruptions to energy supplies had significant consequences for industry and a knock-on effect on freight transport volumes.
Metals plants, mining and processing facilities and other businesses temporarily suspended operations last winter due to electricity supply problems, and the situation was exacerbated by the unusually cold weather. As a result, freight transport volumes in Q1 2026 fell by 6.4% compared with the same period last year to 34.8 million tonnes.
The number of passengers travelling long-distance also dropped to 5.8 million, 10% down on the corresponding period last year.
The main reason for this was Russia's systematic attacks on passenger trains and railway infrastructure, which forced Ukrzaliznytsia to temporarily cut services or alter train routes.
The situation was further complicated by rising fuel prices amid the conflict in the Middle East and general market instability.
Quote: "The procurement cost of diesel fuel increased by almost 50% in March, despite Ukrzaliznytsia remaining one of the most efficient purchasers on Prozorro." [Prozorro is Ukraine's electronic public procurement system, used by government institutions and state-owned organisations to purchase goods, services and works through transparent online tenders – ed.]
Details: In addition, the price of electricity soared due to large-scale Russian attacks on Ukraine's energy infrastructure and the resulting loss of part of the country's generating capacity and the need to import electricity to stabilise the overall situation. The cost of electricity increased by 52%, costing Ukrzaliznytsia an extra UAH 2.58 billion (about US$58 million).
Meanwhile, the company continues to operate by implementing strict cost-saving measures. For the second consecutive year, railway workers' salaries have not been indexed, and previous pay rises were minimal, the company noted.
Ukrzaliznytsia stated that it is maximising the optimisation of development and recovery spending, although additional resources are needed to repair damaged assets. The company has exceeded the target of its operational efficiency improvement programme to the tune of over UAH 10.2 billion (US$230.2 million).
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