JSC Ukrzaliznytsia expects to report a net loss of UAH 21.9 billion and a liquidity shortfall of UAH 26.3 billion, assuming no fare indexation, CEO of the company Oleksandr Pertsovsky said during a press conference on Tuesday, according to an Interfax-Ukraine correspondent.
According to him, among the main reasons for the deterioration in financial performance are a 2.4-fold increase in the cost of electricity, which led to additional expenses of UAH 15.4 billion; the need to index wages – UAH 13.4 billion; a decrease in revenue from freight transportation – UAH 7 billion – due to hostilities and the occupation of parts of the territory, an increase in exchange rate losses from the revaluation of liabilities amounting to UAH 3.8 billion, as well as a 28% increase in diesel fuel prices, which cost the company an additional UAH 2.1 billion.
According to the company's estimates, due to the suspension of fare indexation, the shortfall in cash receipts for the period from 2023 through the first three months of 2026 amounts to UAH 99.5 billion.
In order to cover this financial shortfall, Ukrzaliznytsia is implementing additional optimization measures for 2026, which will allow it to raise UAH 1 billion from the sale of non-core and surplus assets and UAH 2.3 billion in loans from international financial organizations, provided that fare indexation takes place.
Other measures include CAPEX optimization, through which it is planned to accumulate UAH 6.9 billion due to underfunding of critical capital investment needs. At the same time, internal funds for financing CAPEX in 2026 will amount to approximately UAH 16.1 billion.
A government decision is also required to resume, effective July 1, 2026, the sale of electricity to Ukrzaliznytsia through specialized auctions, with the introduction of a corresponding discount from the weighted average market price of electricity.
Other factors include a plan to increase suburban rail fares by 100%, though this requires approval from regional military administrations.
Among the proposed measures to stabilize its financial condition, Ukrzaliznytsia also proposes raising freight rates by 30% effective August 1, 2026. The first stage involves an immediate rate increase and the standardization of rates for empty railcars.
Pertsovsky said June is a critical period for making a decision on revising tariffs, as the regulatory procedure takes about two months.
"This is the last chance to make a decision before August, and by August we'll simply be heading straight into the red at this rate. We still have a guaranteed debt payment due in August," the chairman of the board said.
According to Pertsovsky, a second phase could involve a further tariff adjustment of up to 15% starting in January 2027, though no such decision has been made yet.
As stated in the draft order, the need to adjust tariffs stems from the deteriorating financial condition of JSC Ukrzaliznytsia, whose revenues are insufficient to cover current expenses. The ministry noted that the last tariff adjustment took place nearly four years ago, while between July 2022 and April 2026, the industrial producer price index rose by 252.1%.
According to the Ministry of Development, in 2025, freight volumes decreased by 12.5% compared to the previous year, and Ukrzaliznytsia's net loss amounted to UAH 7.6 billion. In the first four months of 2026, the loss reached UAH 9.3 billion.
At that time, the ministry noted that without tariff indexation, the company's projected net loss for 2026 would exceed UAH 13 billion, and the funding shortfall would reach over UAH 26 billion.
In particular, in January this year Ukrzaliznytsia refused to make $45 million in coupon payments on its 8.25% Eurobonds due in 2026 totaling $703.2 million and its 7.875% Eurobonds due in 2028 totaling $351.9 million, and announced its intention to begin a comprehensive restructuring of its bond obligations with the involvement of financial and legal advisers.
The company cited the ongoing decline in revenue from freight transportation amid a decrease in freight volumes, as well as an increase in attacks on the railway, the total number of which in 2025 (1,195) exceeded the combined total for 2023-2024.
