Since the latest outbreak of the pandemic, China National Railway Group has lost $11.6 billion (80 billion yuan), a sharp increase of 58.5% over the same period last year. It has accumulated losses of $26.9 billion in the two and a half years.
According to Sina web on August 31, the company’s total assets in June 2022 were $1.3 trillion (8.99 trillion yuan). The asset-liability ratio was 66.81%, up 0.48% from the end of the previous year, and total liabilities were estimated to be over $870 billion.
The entire income of China Railway Group in the first half of this year was around $70.4 million (486 billion yuan), down 5.3% from the same period last year.
At the same time, the losses of the three major airlines (Air China, China Eastern Airlines, and China Southern Airlines) all hit record highs, with a total net loss of about $7.2 billion (49.7 billion yuan), and the loss of China Railway Group exceeded the total loss of the three major airlines.
The National Railway Group stated that the main reason for the loss was the pandemic, which had a greater impact on railway transportation operations, especially passenger transportation and diversified operations.
In the first half of the year, China National Railway Group sent a total of 787 million passengers, a year-on-year decrease of 42.8%. During the summer railway transportation from July 1 to August 31, a total of 440 million passengers were sent by railway across the mainland, which was less than 60% in 2019.
China National Railway Group was established on June 18, 2019. Its predecessor was the Ministry of Railways of the Communist Party of China and the China Railway Corporation. The restructured National Railway Group is a wholly state-owned enterprise, and the Ministry of Finance, on behalf of the State Council, performs the responsibility of the investor.
Sina pointed out that while the losses continued, China Railway Group’s debt level also continued to rise. In June 2022, the total assets of China National Railway Group were around $1trillion (9 trillion yuan), and the total liabilities had reached 6 trillion yuan, with an asset-liability ratio of 66.81%, an increase of 0.48% over the end of last year.
The creditor’s rights, debts, brands, qualification certificates, and intellectual property rights of the former China Railway Corporation are all inherited by the restructured China Railway Group.
The primary factors that led to the National Railway Group’s enormous loss.
The first is that the pandemic caused a significant decrease in the National Railway Group’s passenger flow in 2020, which led to a significant decrease in the main business income.
The second is that the National Railway Group’s various costs and expenses are higher.
Up to 2 million people work for China National Railway Group nationwide, which is roughly the same number of people as a third-tier city. Paying the salaries alone is very expensive.