České dráhy defended its rating at Baa2 level. The national carrier has a strong market position.

According to Moody's, the national carrier defended its rating at Baa2 with a stable outlook. In the report, analysts mention the strong position of České dráhy in the market, good predictability of sales thanks to concluded long-term contracts with public transport customers, as well as the company's set measures aimed at reducing the impact of the COVID-19 pandemic.

"It's good news. Despite the difficult situation caused by the pandemic, we have defended the rating. This is a clear signal for investors and at the same time feedback for the company's management. It is confirmation of the mandate by creditors, the mandate to implement the inevitable changes for the future of the national carrier," said The Chairman of the Board of Directors and CEO of České dráhy, Ivan Bednárik.

The ČD Group has launched a number of measures to minimize the economic impact of the pandemic. Thanks to them, the company managed to increase the use of internal capacities. There has also been a temporary reduction in the necessary costs. As a result of austerity measures, there had to be redundancies in both the operational and administrative areas. Cars that were not able to operate for a long time were excluded from the fleet. Several dozen locomotives were also decommissioned. Without these measures, ČD Cargo's bottom line would be at a much larger loss.

"If anything has been done in ČD and ČDC, it is precise that they react flexibly and efficiently to the need to reduce costs. Historically, no management has been able to achieve what is happening within the ČD Group. Respond to a crisis situation, lighten costs with incredible elegance, but also hardness and efficiency. Personnel savings at ČD and ČDC are the largest in history and very effectively targeted – targeted/tripled managerial functions are being dismantled, stocks in inefficient areas are being reduced. It can be said that personnel costs are being rapidly reduced without jeopardizing the future return to performance gains and maximizing transport," adds railway expert Rybáček.

The defense of the rating confirms the strong position of České dráhy on the railway market. The national carrier defended its position with a stable result. This, too, is clearly a signal to ČD's management that the measures that were put in place were correct and kept the company in a leading position in the market.