VR Group’s Business Review for January-March 2023

VR-Group Plc, Interim Report, 28 April 2023 at 10:15

VR Group’s Business Review for January-March 2023 – the number of journeys in long-distance traffic has returned to the pre-pandemic level

VR Group's profitability improved as the number of trips in long-distance traffic rose slightly above the pre-pandemic level of 2019, especially thanks to leisure travel. The profitability of city traffic in Finland was weakened by exceptionally high inflation. In freight transport, it has been possible to partially compensate for the shutdown of eastern traffic with domestic transport. As a prerequisite for the growth of environmentally friendly rail traffic, VR  proposes investments in the condition and capacity of the state's rail network as entries in the Government Programme.

January–March 2023 (Q1) in brief:

  • The Group’s net sales increased by 49.9% to EUR 302.9 (202.1) million.
  • Comparable net sales without the effects of the business acquisition in Sweden increased by 14.9% to EUR 232.3 million.
  • Comparable operating result (EBIT) was EUR -0.2 (-24.9) million or -0.1% (-12.3%) of net sales.
  • Operating result (EBIT) was EUR 2.8 (-24.9) million, or 0.9% (-12.3%) of net sales.
  • Cash flow from operating activities was EUR 31.2 (3.1) million.
  • The number of journeys on long-distance trains increased by 52.6% in January-March, to 3.4 (2.2) million journeys.
  • The railway transport volumes of VR Transpoint decreased by -24.2% and amounted to 5.9 (7.8) million tonnes.
  • VR invested into procuring new rolling stock for night train traffic from Škoda Transtech Ltd.  The value of the equipment acquisition is approximately EUR 50 million.
  • VR's business structure was renewed as of 1.1.2023 and now consists of three business segments: VR Long-distance Traffic, VR City Traffic and VR Transpoint.

Key figures




Net sales, M€




Comparable EBITDA, MEUR*




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Operating result (EBIT), MEUR




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Comparable operating result (EBIT), MEUR*




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Net profit/loss for the period, MEUR




Cash flow from operating activities, MEUR




Investments, MEUR




Capital invested at the end of the period, MEUR




Return on capital employed (ROCE), %




Comparable return on capital employed, %




Return on equity (ROE), %t




Net interest-bearing debt at the end of the period, MEUR




Gearing, %




Average number of personnel




* VR Group presents comparable EBITDA and comparable operating result (EBIT) as alternative performance indicators. The aim of comparable performance indicators is to improve comparability between reporting periods. 
Comparable EBITDA uses same definitions of items affecting comparability as comparable EBIT. The calculation formulas for the figures are disclosed in VR Group’s Annual Report for 2022.
The figures are unaudited.
The comparative figures in brackets refer to the corresponding time period in the previous year unless otherwise stated.

CEO Elisa Markula:

In the first quarter, VR’s net sales increased by 49.9% to EUR 302.9 (202.1) million, boosted by the increased number of journeys and the acquisition carried out in Sweden. Comparable operating profit (EBIT) was negative, amounting to EUR -0.2 million, or -0.1% of net sales. High energy prices and inflation increased production costs and weakened profitability, as did the industrial action at the end of the quarter.

In VR Long-distance Traffic, 3.4 million journeys were made in Finland, which translated to a +2% increase from the corresponding period in 2019. Demand was also boosted by the temporary VAT rate reduction for public transport, which VR passed on directly to the prices of train tickets. Leisure travel has increased and now accounts for more than half of all long-distance journeys, and commuting has also recovered to the pre-pandemic level. In long-distance traffic, the customer experience was at an all-time high during the first quarter. The Net Promoter Score (NPS) was as high as 53, compared to 33 in the corresponding period the previous year. Customers were particularly satisfied with punctuality, conductor services and digital services. Punctuality was 86% in the early part of the year, which is a good result in the winter months.

VR City Traffic comprises competitively tendered contract traffic in regional bus and rail transports in Finland and Sweden. As expected, the result for city traffic was negative due to the long-term contracts in Finland, which were concluded before the exceptional changes in the operating environment last year. The accelerated inflation caused by Russia’s war of aggression has a significant impact on the cost structure of city transport, and it will take a while for the index-based increases in contracts to affect the profitability of our operations. The industrial action that affected bus and rail traffic in March also had a negative impact on the profitability of city traffic. As expected, VR Sweden’s operating result was positive, despite the costs of integration related to the acquisition completed in July. In line with its growth strategy, VR actively participates in regional competitive tendering for contract traffic in Sweden.

In January–March, VR Transpoint transported 7.0 million tonnes of goods by rail and road. Transport volumes decreased by -22% compared to the same period last year, as VR’s Eastern freight traffic was completely discontinued by the end of 2022. However, higher domestic demand and price increases have partly compensated for the loss of Eastern traffic.

Our sustainability efforts were recognised in March when VR was selected as Finland’s most sustainable brand in the transport sector in the Sustainable Brand Index survey. Investments in the energy efficiency of train traffic, in accordance with VR’s energy saving programme, saved approximately 7% in energy costs during the quarter. 

In line with its revised strategy, VR is seeking EUR 250 million profit improvement measures by 2027 that will enable the financing of its billion-euro rolling stock investments and ensure its continued competitiveness. The goal is to identify profit improvement measures through additional sales, the development of commercial models and cost-effectiveness to cover the additional costs arising from inflation and improve the company’s profitability. Meanwhile, we will continue our investments in the continuous improvement of customer experience. In the first quarter, VR announced the purchase of nine sleeping cars and eight car-carrier wagons from Škoda Transtech Oy for use on night trains starting in 2025.

VR expects the new government to take measures to reduce the railway network’s current maintenance backlog of more than one billion euros and to increase track capacity. As half of the delays are due to the poor condition of the rail infrastructure, properly targeted and adequate infrastructure investments are a prerequisite for increased rail traffic, improved passenger experience, industrial competitiveness, green transition and security of supply. VR is in favour of increasing competition in climate-friendly rail traffic, which would increase the market as a whole. In  passenger train services, municipalities and joint municipal authorities should be allowed to organise regional contract traffic in accordance with the Swedish model. A public rolling stock company leasing equipment for publicly funded rail transport could strengthen competition and the supply of contract traffic. Competition in long-distance and freight transport must be further developed on market terms, to avoid using taxpayers’ money for rolling stock or transport.

Outlook for the current year

VR expects that the comparable operating profit (EBIT) for 2023 will improve compared to 2022. The general economic situation in Finland is clouded by high inflation, rising energy prices, higher interest rates and low consumer confidence in the economy. The underlying factors are Russia’s invasion of Ukraine and geopolitical uncertainty. The economic situation is significantly reflected in VR’s business operations, profitability and near-term outlook. Especially high inflation has a negative impact on VR’s profitability.

VR discontinued its Eastern freight traffic completely in 2022 due to Russia’s war of aggression, which will reduce total rail logistics volumes this year. VR expects domestic transport volumes to increase, especially in roundwood transports. This will also be affected by the forest industry’s new investments, such as the Kemi bioproduct mill that is set to come online. The general economic development affects Finnish industry and, consequently, transport needs and volumes.

Train travel has recovered after the COVID-19 pandemic eased. Nevertheless, the pandemic has changed the way people work and, as a result, their mobility patterns. Remote work has become increasingly common, and travel demand has been driven by leisure travel. The total number of long-distance journeys is expected to increase from the previous year. This increase will mainly take place in the early part of the year, as the pandemic reduced travel volumes particularly in early 2022. The temporary VAT rate reduction for public transport, effective in the first four months of the year, has been fully passed on to ticket prices by VR. In city traffic in Sweden, net sales and profitability will decline compared to 2022 due to some of the existing agreements expiring and the new agreements not starting until late 2023.

This stock exchange release is a summary of VR Group’s Business Review January–March 2023. The complete report is attached to this release.

VR-Group Plc


More information: 

VR Group Media Desk, tel. +358 (0)29 434 7123

About VR-Yhtymä Oyj

At VR, we promote responsible transport of the future. We are a passenger, logistics and maintenance service company owned by the Finnish state, and we increase the popularity of carbon-neutral rail and city traffic. We ensure smooth daily travel in Finland and Sweden and act as a pillar of support for industry in Finland’s logistics. In 2022, our customers made a total of 194.2 million journeys with us, and we transported 34.4 million tonnes of goods. Our net sales amounted to EUR 1,107.0 million and we employed approximately 9,000 top professionals. Further information: https://www.vrgroup.fi/en/    


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