September 30, 2016

PKP Cargo slips into the red

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POLAND’s largest rail freight operator PKP Cargo slipped back into the red in the first-half of 2016 as a combination of “difficult” market conditions, and challenges facing Czech subsidiary AWT put the company under financial pressure.

Ebitda fell 67% year-on-year to Zlotys 130m ($US 34m) and the company recorded a net loss of Zlotys 195m, compared with a profit of Zlotys 153m in the first-half of 2015. First-half results for 2016 take into account the Zlotys 140m acquisition of AWT.

Revenues increased 3% to Zlotys 2.12bn while operating costs climbed 23% to Zlotys 2.32bn.

PKP Cargo says a delay in the start of major infrastructure projects in Poland had a significant impact on aggregate traffic, while the renovation of a blast furnace at the plant of a key customer in southern Poland cut domestic steel production by 11%, with a knock-on impact on rail volumes.

In the Czech Republic, AWT was hit by the insolvency of a major customer, Ostrava-Karvina Mines (OKD), in May. PKP Cargo has decided to make write-offs due to the permanent impairment of AWT Group’s assets, which have had a negative impact on the group’s results.

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