CZ/SK verze

PKP CARGO Seeks a Way Out of Crisis, Subsidiaries Show Determination

PKP CARGO Seeks a Way Out of Crisis, Subsidiaries Show Determination
photo: PKP CARGO International / Public domain /PKP CARGO International
10 / 06 / 2024

The situation in the Polish company PKP CARGO is very tense. However, not all companies in its holding are facing the same problems. We took a look at two subsidiaries - Polish PKP CARGO Service and Czech PKP CARGO INTERNATIONAL. The results are surprising.

In recent months, RAILTARGET's editorial staff reported on the complicated situation of the Polish company PKP CARGO. But not all the companies in its holding are in a bad way. We have examined two in detail: the Polish subsidiary PKP CARGO Service and the Czech PKP CARGO International.

PKP CARGO Service is responsible for the PKP sidings in Poland, which it maintains, reconstructs, diagnoses, and services, including ECM maintenance of rolling stock, railway transport, and shunting operations. This company has consistently recorded positive economic results. In 2023, it achieved a net profit of PLN 25.7 million (approx. EUR 5.95 million). In 2022 (as well as in previous years), it was even included in the Forbes Diamonds 2022 list, which features the most dynamic Polish companies that influence Polish business and the country's economic development.

The Czech company PKP CARGO INTERNATIONAL is doing similarly well. The latter is one of the most important providers of rail freight transport services in Europe, focusing on the transport of heavy commodities, e.g., coal, steel, building materials, or products of the automotive, food, and chemical industries, as well as the operation of sidings, railway construction, and track services, the rental, repair, and cleaning of railway carriages, and the repair and maintenance of locomotives. From 2020, when the company reported a negative operating result of CZK 75.7 million (approx. EUR 3 million), it reached a positive result of CZK 5.7 million (approx. EUR 232k) in 2021 and a result of CZK 13.8 million (approx. EUR 561k) in 2022. It is thus clear that the company is doing well despite the unfavorable market development.

However, the RAILTARGET editorial team noticed one aspect that both companies currently share. This is the person of their Chairman of the Board, Zbigniew Prus, who is considered an experienced and progressive manager with over 33 years of experience in the railway sector.

In addition to PKP CARGO SERVICE and PKP CARGO INTERNATIONAL, he also serves as Chairman of the Supervisory Board of AWT ROSCO a.s., a member of the PKP CARGO INTERNATIONAL Group. Prus has held several positions during his career, and it is not unnoticed that he started as a traction engineer. The progressiveness of Prus' approach is supported by the possibility of pursuing Poland's first Digital Automatic Coupling (DAC) testing project under the PKP CARGO SERVICE banner, which is now being speculated. PKP CARGO INTERNATIONAL has already presented its Czech project.

As far as the good economic results of PKP CARGO INTERNATIONAL are concerned, it is important to note that the Vice-Chairman of the Board of Directors, Michal Kubicek, is undoubtedly responsible for this. He joined the board in 2021 when the company managed to reverse the negative economic results of previous years. It should be recalled that Kubicek has been working in the railway sector for 23 years, his entire career within PKP CARGO INTERNATIONAL.

Thus, unlike the parent company, this duo of managers has managed to carry out a successful consolidation of fleets and operations. They are achieving positive economic results, even though PKP CARGO itself is losing its market share in Poland substantially (from 56% to 33%). Even Piotr Malepszak, State Secretary (Deputy) for Railways of the Ministry of Infrastructure, assessed that the situation at PKP CARGO is due to an accumulation of missteps in management, investments, personnel management, and poor business decisions. To stabilize the situation, PKP CARGO will introduce austerity measures in the form of barriers to work for up to 30% of all employees from 1 June 2024. Perhaps it is time for the Polish parent to take inspiration from its successful subsidiaries.