What’s new: China’s state railway operator recorded nearly 100 billion yuan ($13.7 billion) in net losses in the first nine months this year as Covid resurgence and strict virus control measures disrupted travel.
China State Railway Group Co. Ltd. said revenue for the first three quarters declined 0.5% from a year earlier to 782.3 billion yuan. The net loss widened 36% year-on-year to a record 94.7 billion yuan, exceeding combined losses in 2020 and 2021.
The high-speed railway line linking Beijing and Shanghai, the most profitable route, reported net earnings of 152 million yuan in the first nine months, down 96.5% from a year earlier.
Railway investment also declined. Nationwide fixed-asset investment in the railway sector dropped 6.89% to 475 billion yuan during the first nine months, according to China State Railway.
As of the end of September, China State Railway’s debt-to-assets ratio was 66.69%, 0.36 of a percentage point higher than at the end of last year. The company said cash flow and debt repayment capacity remain sound.
The context: The number of railway passengers plunged deeply in China this year amid tightened Covid controls.
During the first nine months, 1.38 billion trips were made through the country’s railway system, down 33% from the same period last year, data from the National Railway Administration showed.
Fourth-quarter data is likely to remain sluggish as passenger turnover during the week-long national holidays in October — one of the busiest periods for railway travel — plunged 39.87% this year.
Railway freight services remained stable. Total goods transported rose 6.3% in the first nine months to 2.9 billion tons.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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