VR Group's business review for January–December 2021 – Rail travel was focused on leisure travel, freight traffic volumes at a good level

VR Group's net sales developed positively during 2021, but the operating profit was still negative. The was in large part due to the COVID-19 pandemic and related restrictions, which had a large impact on travel demand. VR Transpoint’s transport volumes continued to increase.

January–December 2021 in brief:

  • VR Group’s net sales increased by 5.9 per cent to EUR 838.3 (791.9) million. The COVID-19 pandemic continued to have a significant impact on VR's passenger traffic volumes, and the recovery in demand was slow. However, the impact of the pandemic on freight traffic remained moderate.
  • VR Group’s operating profit (EBIT) from January to December was EUR −22.7 (−24.6) million. Comparable operating profit (EBIT), i.e. operating profit excluding profits and losses from sale of fixed assets and other material one off items, improved to EUR −14.1 (−26.1) million. VR Group's loss for the financial year amounted to EUR −13.7 (−33.1) million.
  • The number of journeys on VR Passenger Services’ long-distance trains increased by 5.1 per cent from January to December, to a total of 8.5 (8.1) million journeys made. This was due to a growth in leisure travel, as work-related commuting still clearly fell short of the period before the pandemic. 
  • VR Transpoint’s railway transport volume remained at a good level and grew to EUR 37.4 (36.6) million tonnes during the period under review.  

President and CEO Lauri Sipponen:

“The prolonged coronavirus pandemic continued to have a significant impact on rail travel and thus on VR Group's entire business during 2021. Although the demand for VR Passenger Services did not recover to the pre-pandemic level, it is nevertheless positive that long-distance travel volumes increased as a result of leisure travel. In freight traffic, however, transport volumes remained at a good level and VR Transpoint's performance was particularly important to our company as a whole in 2021. At VR FleetCare, the pandemic had a particular impact through the development of passenger traffic volumes and the need for fleet maintenance. The whole Group has experienced tough times during this exceptional pandemic period, but our employees have nevertheless made valuable efforts to keep Finnish society moving.  

VR Passenger Services’ travel volumes followed the undulations of the pandemic and the development of restrictions during 2021. Travel was mainly focused on leisure travel, as extensive remote working reduced everyday commuting. In the spring, the number of passengers on trains had to be limited for a limited period of time, and the restaurant cars were also closed for part of the year. Train traffic between Finland and Russia was interrupted for most of the year. VR Passenger Services ensured safety by using extra train capacity when possible and, for instance, by implementing enhanced cleaning measures. When the situation so required, a mask mandate was in place on trains and COVID-19 passports were required in restaurant cars. In addition, customers were offered additional services related to the pandemic situation, such as the possibility to reserve an empty adjacent seat or order portions from the restaurant car to their own seat. 

Our company took a significant step forward in June 2021, when commuter train service under the new HSL contract started in the capital region. We had won the historic tender earlier, in the spring of 2020, and other forms of passenger transport were opened up to competition on 1 January 2021, when VR’s exclusive rights to long-distance traffic expired. The background to the situation was a contractual arrangement between VR and the Ministry of Transport and Communications, concerning the purchase of contract traffic on routes, which were not profitable on market terms.In 2021, we negotiated a new contract traffic agreement with the Ministry of Transport and Communications for the years 2022–2030. At the end of the summer of 2021, we took another important step forward, when tram traffic in Tampere started on 9 August 2021, and at the same time, we started as a tram operator. 

The COVID-19 pandemic had a relatively minor impact on freight traffic in 2021. VR Transpoint's market situation was positive because the global economy was on a growth track and Finland's economic and export performance was favourable. In Finland, especially in the forest and metal industry, the demand for transport was at a good level; however, there was variation in Eastern traffic volumes. VR Transpoint signed significant contracts during the year. As an example, Metsä Group chose VR Transpoint as its logistics partner for the transport of roundwood to the bioproduct mill to be constructed in Kemi. VR Transpoint also strengthened its position as a logistics operator in the circular economy with the acquisition of Transitar Oy. 

Our maintenance subsidiary VR FleetCare continued in 2021 to actively seek new business opportunities and customers. VR FleetCare signed a contract with Norwegian company Vy Tog As to modernise eight sleeper cars. The company will also begin maintenance on Pohjolan Liikenne’s e-buses in Tampere and will continue the maintenance and lifecycle services of Allegro trains operating to St. Petersburg for 20 years.  

We ensure future success with significant investments in environmentally friendly rolling stock and customer experience. For VR Passenger Services, we reported progress in the acquisition of new commuter and night trains in 2021. The procurement of commuter trains will initially involve approximately 25 new electric trains, replacing the old fleet, and the night train procurement consists of 9 sleeper cars and 8 car-carrier wagons. Additionally, Pohjolan Liikenne brought more e-buses to the roads. With the new contract with the bioproduct mill in Kemi, VR Transpoint is investing in new raw wood wagons. The supply of Sr3 electric locomotives continued during the review period, and new, lower-emission diesel locomotives are also coming in, especially for freight traffic use. In total, it is planned that we will invest a total of approximately EUR 1 billion in rail transport stock in Finland over the next six years. The bulk of the sum is allocated for the procurement of new electric locomotives, electric trains and diesel locomotives, as well as for the maintenance of existing rolling stock. 

Electronic rail and urban transport is at the core of our business. We believe that in the longer term, megatrends from climate awareness to urbanisation will support our travel, logistics and maintenance business. However, it is clear that, with the prolonged pandemic, we as a society must turn our attention to public transport, which is threatened by a decline in service levels and development. The prerequisites for sustainable mobility also include the good condition of the rail network and sufficient track capacity, both of which affect the punctuality of rail traffic, the security of supply and can, if neglected, limit future growth. At VR Group, we are working to ensure that more and more business and private customers choose trains as their mode of transport and that the usage share of sustainable modes of transport grows. It is not only a question of smooth everyday traffic and efficient industrial transport, but also of achieving the climate goals of society as a whole.”

Read the entire business review for January–December 2021 

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