In order to cover losses of last year, Latvian Railway (LDz) may request EUR 26 million from the state, as LETA was told by LDz representatives.
LDz reported that on the 27th of December 2024 the company received EUR 46.8 million from the state to increase the company’s capital, which ensured the financial equilibrium payments of the State public-use railway infrastructure manager for the years 2022 and 2023.
In particular, the company noted that the day after the received payment, LDz paid the deferred mandatory state social insurance contributions in full.
The amount of state social insurance contributions deferred before the payment was approximately EUR 5 million euros, added LDz.
LETA previously reported that on the 17th of December, the Latvian government approved the proposal from the Ministry of Transport that provided for increasing the capital of LDz by EUR 46.8 million.
The losses of LDz in 2022 amounted to EUR 24 358 998, of which ten million euros in 2023 were covered by the state from funds for unforeseen events. In turn, in 2023, the losses of LDz amounted to EUR 32 439 157, and it was not possible to cover them from other types of economic activity.
Thus, for 2022 and 2023, the total amount of uncovered losses or financial equilibrium amounted to EUR 46 798 155.
The Ministry of Transport explained that in 2018, the multi-annual agreement concluded by LDz with the State in the person of the Ministry of Transport for 2018-2022 stipulated the mechanism for ensuring the financial balance of the railway infrastructure manager.
However, for the period from 2023, contrary to the provisions of the Railway Law, a multi-annual contract has not been concluded, therefore financial equilibrium payments shall be made in compliance with the requirements of the Railway Law.
The Railway Law determines that, in cases specified by the State, the State public-use railway infrastructure manager balances revenues and expenditures without State funding. However, the Ministry of Transport points out that since 2019 a number of extraordinary circumstances have occurred, as a result of which it has not been possible to implement it, and from 2019 an annual deficit of public-use railway infrastructure funding has formed in LDz.
Despite previously significant measures taken to reduce costs, which at the beginning of 2022 ensured profit, Russia’s full-scale invasion of Ukraine, thus adopted international sanctions, inflation and rise in labour costs have negatively affected the operating result of LDz.
It has also been reported that in 2023 the turnover of LDz Group was EUR 263.529 million, which is 3.4% more than in 2022, but the group suffered losses of EUR 3.231 million.
At the same time, the turnover of LDz’s parent company in 2023 was EUR 165.41 million, which is 8% more than in 2022, which is due to the fact that in 2022 the financial balance payment in the amount of EUR 24.359 million from the state budget was applied to the revenue, while last year the financial balance payment in the amount of EUR 32.439 million was applied to the revenue.
LDz is a public-use railway infrastructure manager and the dominant company of the group LDz. The Group also includes “LatRailNet”, which performs infrastructure charging and allocation of railway infrastructure capacity, “LDz Cargo”, which provides rail freight transport and international passenger transport, rolling stock repair and maintenance company “LDz Rolling Stock Service”, security company “LDz Apsardze” and logistics company “LDz Logistics”.