China’s railway operator brings in gravy train, posting profits and lowering debt ratios

China’s state-owned railway operator has bucked economic trends by registering profits and lower debt ratios for first six months of 2024

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China’s railway operator has gone against the grain of recent economic trends, recording profits and lower debt ratios for the first six months of 2024. Photo: Xinhua

Published: 9:00am, 3 Sep 2024Updated: 9:17am, 3 Sep 2024

China’s state-owned railway operator – which runs the world’s largest high-speed railway network – has chugged ahead of a slow-growing national economy, posting profits and an increase in passengers over the first half of 2024.

China State Railway Group swung back to a net profit of 1.7 billion yuan (US$239.6 million) from a loss of 11.1 billion yuan for the first half of 2023, although first-half sales revenue dropped to 579.4 billion yuan from 580.7 billion yuan over the same period, according to a financial disclosure filed with Chinabond on Saturday.

January-June freight revenue reached a whopping 484.1 billion yuan, an increase of 4.7 per cent from the first six months of 2023. Most of China’s domestic freight moves by rail.

Despite persistent overseas worries over the size of its debt – which rose 1.8 per cent year on year to 6.2 trillion yuan – the operator’s debt ratio dropped to 64.6 per cent from 66.2 per cent a year earlier, registering a decline for two consecutive years as well as a 10-year low.

“As demand for passenger and freight transport continues to grow and dividends from the railway network emerge, the operating performance of China Railway Group continues to improve,” said the company in its financial statement.

The railway operator completed a record 2.1 billion passenger trips from January to June this year, 18.4 per cent more than the same period last year.

Travel momentum kept up through the summer. The group, which was formed after the dissolution of China’s Ministry of Railways in 2013, logged 887 million trips in July and August, up 6.7 per cent from the year before.