VR Group’s Financial Statements Release 1 January to 31 December 2023: Profitability improved significantly

VR-Group Plc, Stock Exchange Release, 16 February 2024 at 9:30 a.m.

VR Group’s Financial Statements Release 1 January to 31 December 2023: Profitability improved significantly

VR’s profitability improved significantly in 2023 as the number of domestic long-distance journeys rose to a record-high level. Measures to adjust costs in freight traffic have mitigated the impact of decreased transport volumes. The weak profitability of long-term contracts in contract traffic weakened profit development. Strategy implementation and acceleration of our profit improvement will continue with steadfast commitment. By the end of 2027, the company is aiming for EUR 250 million in turnaround improvement measures to secure its competitiveness and ability to finance rolling-stock investments of almost EUR 1 billion.

October-December 2023 (Q4) in brief:

  • The Group’s net sales decreased by -4.4% to EUR 313.2 (327.6) million.
  • Comparable operating result (EBIT) was EUR 16.7 (0.1) million or 5.3% (0.0%) of net sales.
  • Operating result (EBIT) was EUR 21.9 (-19.9) million, or 7.0% (-6.1%) of net sales.
  • Cash flow from operating activities was EUR 53.7 (76.2) million.
  • The number of journeys on long-distance trains increased by 3.3% in October-December, to 3.9 (3.8) million journeys.
  • Railway transport volumes in freight traffic decreased by -15.6% and amounted to 6.2 (7.4) million tonnes.

January-December 2023:

  • The Group´s net sales increased by 10.6% to EUR 1,224.1 (1,107.0) million.
  • Comparable net sales without the effects of the business acquisition in Sweden completed on 1 July 2022 increased by 1.1% to EUR 966.6 million.
  • Comparable operating result (EBIT) was EUR 59.9 (6.0) million or 4.9 % (0.5 %) of net sales.
  • Operating result (EBIT) was EUR 81.5 (-58.4) million or 6.7 % (-5.3 %) of net sales.
  • Cash flow from operating activities was EUR 203.8 (179.9) million.
  • The number of journeys on long-distance trains increased by 14.2% to 15.1 (13.2) million journeys.
  • The railway transport volumes of VR Transpoint decreased by -21.3% and amounted to 23.4 (29.7) million tonnes.
  • VR invested into procuring new rolling stock from Škoda Transtech Oy for night-train traffic. The value of the equipment acquisition is approximately EUR 50 million.
  • VR’s revised business structure, effective as of 1 January 2023, now comprises three business segments: VR Long-distance Traffic, VR City Traffic, and VR Transpoint.
  • The Board of Directors proposes to the Annual General Meeting that an equity repayment of 57.0 million euros, or 25.91 euros per share, be distributed from the distributable equity of the company.

Key figures





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* VR Group presents comparable EBITDA and comparable operating result (EBIT) as an 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.

VR Group acquired the Swedish bus and rail operator Arriva Sverige. The transaction was completed on 1 July 2022 and the company’s name was changed to VR Sverige AB.

The average number of personnel is the average number of personnel for the last month of the reporting period as FTE.

CEO Elisa Markula:

“VR’s comparable operating result improved significantly in 2023 and amounted to EUR 59.9 million. Our profitability was improved by the growth in the number of long-distance journeys and the determined execution of our turnaround improvement programme, as well as the decrease in energy costs. At the same time, the profit development was slowed down by weak volumes of freight traffic and changes in city traffic contract portfolio. Comparable net sales remained at the previous year’s level.

In early 2023, we updated our strategy to strengthen our competitiveness. In line with our strategy, we are seeking growth in other market areas as well. After a few loss-making years, we are now focusing on profitability, growth and the development of a work culture based on our values. The direction is right, but the journey to improve our competitiveness continues.

The popularity of trains as a means of transport continued to grow, and in 2023, a record number of more than 15 million train journeys were made in long-distance traffic in Finland. The increase in the number of journeys was influenced by the reform of dynamic pricing and, in particular, the addition of lower price points. We have also succeeded well in enhancing the customer experience, with the Net Promoter Score (NPS) being 49 (38). The NPS was particularly impacted by the ease of buying a ticket, as well as improved travel comfort and information provided during the trip. We also developed our offering of additional services. These were well received by our customers, accelerating the improvement of profitability.

In city traffic, profitability remained weak due to the current low profitability of the long-term contract-traffic agreements signed before the pandemic, an expired contract-traffic agreement in Sweden, and integration expenses associated with business operations in Sweden. In city traffic, we seek growth through the continued electrification of our bus services. We have won new contracts in regional rail and bus tenders in Finland and Sweden.

In freight traffic, the challenging environment for heavy industry further reduced freight volumes that have already weakened as a result of the termination of Eastern traffic. In 2023, the total volume of domestic freight traffic decreased by -2% from the previous year. However, as industrial volumes decreased, we were able to respond to the challenges of the operating environment by developing new custom service and pricing models for our customers. It was necessary to adjust railway freight operations and have temporary layoffs throughout the autumn.

In accordance with the updated strategy, we are seeking EUR 250 million of profit improvement measures by 2027 that will enable the financing of our billion-euro rolling-stock investments and ensure the company’s continued competitiveness in the future. The goal is to identify profit improvement measures through additional sales, develop commercial models and achieve cost-effectiveness to cover the additional costs arising from inflation. Together these measures are aimed at improving the company’s profitability. Meanwhile, we will continue our investments in the continuous improvement of the customer experience. We will also improve profitability by further developing our operational efficiency and conducting critical assessments of our fixed costs.

We continue to be actively involved in reforming our industry and contributing to the implementation of the Government Programme items relating to rail transport. We will focus on our core business as a service company in passenger traffic and logistics. In order to create a neutral competitive environment, we will divest station properties and other rail infrastructure still under VR ownership. In 2023, we created the prerequisites for market-based traffic competition by selling 11 Sm2 commuter trains to Suomen Lähijunat Oy and announcing that we will put approximately 10 railworthy diesel locomotives, 29 IC single deck cars and 22 “blue cars” up for sale. VR promotes the establishment of a rolling stock company for contract traffic, which would create a framework for completely new tendered commuter traffic. Our goal is to promote the growth of regional contract traffic subject to competitive tendering, and simultaneously to create the conditions for the growth of market-based traffic under the Open Access principle. Adequate and appropriately targeted infrastructure investments are the most important prerequisites for the growth of rail traffic, increased competition and the achievement of emission-reduction targets for the transport sector.

Sustainability is at the core of all of our operations. In terms of occupational safety, the year 2023 was the best on record. The overall number of accidents decreased, and the number of safety observations made by the personnel increased. We raised the level of our sustainability efforts and committed to the Science Based Targets initiative in December 2023.  Together with our train drivers, we have also implemented an energy saving programme based on how drivers operate the trains. The programme improved the energy efficiency of train traffic by approximately 8% in 2023.

I want to thank our personnel for their commitment to our strategy and profit improvement targets. Together, we will build the sustainable VR of the future. Our values – we care, we work together, we drive improvement – guide us in moving together towards a better world.”

Outlook for the current year

VR expects that comparable operating profit (EBIT) for 2024 will improve compared to 2023.

The popularity of long-distance train travel increased to a record-high level in 2023. Business and work travel on weekdays and leisure travel grew in popularity. VR expects that the popularity of train travel will continue to be strong and that the number of journeys in 2024 will increase compared to the previous year.
The weakened business cycle in heavy industry in Finland has been reducing freight traffic railway transport volumes since the second quarter of 2023. Freight traffic railway transport volumes are expected to continue at a lower than normal level. VR expects transport volumes to increase in 2024 compared to the previous year, especially during the second half of the year. The price level of railway transport is expected to increase in 2024 compared to the previous year.

The negative impacts on profitability of long-term city-traffic contracts concluded before the pandemic are expected to continue. Through the measures to increase efficiency and the renewal of our contract portfolio, the profitability of city traffic is expected to improve but still remain challenging.

Annual Report 2023, Corporate Governance Statement and Remuneration Report

During week 12, VR Group will publish, as a separate release, its Annual Report and Financial Statements, Corporate Responsibility Report, Remuneration Policy and Remuneration Report, and Corporate Governance Statement.

VR-Group Plc

Board of Directors


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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