Ukrzaliznytsia may turn profitable in 2027 under base or positive scenario – 2027 budget draft

Ukrzaliznytsia, the Ukrainian national railway company, is projected to transition to profitability by 2027 depending on various scenarios outlined in the 2027 state budget draft. The company is anticipated to remain unprofitable in 2026 across all scenarios. In the base scenario, Ukrzaliznytsia could become profitable in 2027, with a pre-tax loss of UAH 10.6 billion narrowing to a profit of UAH 0.9 billion in the following year.

The positive scenario sees the company turning profitable in 2027, with a pre-tax loss shrinking to UAH 3.6 billion by 2028. Conversely, under the negative scenario, the company's pre-tax loss would only narrow to UAH 0.5 billion by 2028.

Rail transportation volumes are expected to adhere to the financial plan under the base scenario, with freight tariffs increasing by 30% in August 2026 and an additional 15% from January 1, 2027, followed by indexation at 80% of inflation. In the positive scenario, tariffs would grow in line with inflation, while under the negative scenario, tariff increases would not occur, with indexation at 60% of inflation.

International passenger transportation tariffs under the base scenario would align with inflation, while intercity and suburban tariffs remain unchanged. Under the negative scenario, tariffs for all passenger transportation categories would also remain unchanged.

Regarding operating expenses, the base scenario anticipates price growth in line with inflation, a 2% staff reduction, and 10% annual wage growth. Under the positive scenario, wages would elevate by 15% annually. In the negative scenario, prices would rise with inflation, maintenance and repair volumes would decrease, staff would be cut by 5% with wages growing 6% annually, and a reduced workweek and downtime are expected.