RUSSIAN Railways (RZD) has revealed in its 2025 interim report that net profits have fallen by 96% to Roubles 2.7bn ($US 33.8m) in the first six months of this year. This is a significant decline from the first half of 2024, when RZD earned a net profit of Roubles 61.8bn.
A combination of high interest payments and the wider crisis in the country’s rail industry is to blame, with the outlook for the second half of the year set to be gloomy.
RZD's financial health took a sharp downward turn in the second quarter of 2025, when profitability spiralled into a net loss of Roubles 10.55bn, a stark contrast to the net profit of Roubles 13.25bn recorded in the first quarter. RZD’s net revenue rose by 10.8% to Roubles 1.5 trillion in the first half of 2025.
A high credit burden and falling freight loadings are the key factors dragging RZD's financial performance down, according to local analysts.
“Net profits are largely determined by the size of payments needed to serve existing loans,” says Sergey Frolov, managing partner of NEFT Research, a Moscow-based think tank. "The forecast for the second half of the year is more pessimistic - judging by the current dynamics, the decline in freight turnover will accelerate."
Freight volumes are diminishing significantly. During the first half of 2025, RZD handled 553.5 million tonnes, 7.6% down compared with the same period the previous year. In June, the decline in freight volumes reached 9.2%.
The discouraging financial results appear to have prompted RZD to embark on a belt-tightening policy. Since last month employees of RZD’s central office and at least two regional branches have been requested to take two additional days leave at their own expense, according to local business news outlet RBC. The move allows RZD to retain staff who would otherwise have to be made redundant.
