95 % Decline in Profits: “russian Railways” Heading for Bankruptcy

According to the results of the first half of 2025, “russian Railways” financial situation continues to deteriorate rapidly. Transport volumes decreased by 7.3 % year-on-year, with the largest declines in grain deliveries (–35.6 %), industrial cargo (–19.4 %) and building materials (–17 %). This downward trend has been observed for the third year in a row.

The company’s net profit decreased by 95 % to $33.9 million. Against the background of declining freight traffic, “russian Railways” expects to lose $1.1 billion in revenue in 2025. At the same time, the company’s updated financial plan looks unrealistic amid growing debt pressure and falling profitability.

The corporation has cut investments and suspended infrastructure projects aimed at increasing exports to China. Track modernization and equipment purchases have been frozen. Since July, employees have been forced to take two days of unpaid leave each month. Besides, 30,000 employees of the “russian Railways” security service are armed with firearms with a caliber of up to 20 mm, which creates the risk of escalating social tensions.

The crisis is unfolding against the background of corruption scandals. The corporation’s top management is embezzling millions. One of the latest examples is the arrest on August 2 of the monopolist’s director for energy Valentin Sanko, on charges of embezzling more than $18.5 million.

Despite the company’s systemic role in the economy, the expected state support is unlikely to be effective given the massive growth of the budget deficit.