March 11, 2016

SNCF reports rising revenues but gross profit decline

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REPORTING its first results as an integrated railway, French National Railways (SNCF) achieved a 5% increase in revenue from €29.9bn to €31.4bn in 2015, although Ebitda fell 4.6% from €4.6bn to €4.4bn.


Current operating profit dropped by 28.5% from €1.76bn to €1.26bn. However, an increase in net profit from $135m to €377m was turned into a loss of €12.2bn following an impairment of its assets which SNCF describes as an accounting technicality which has no impact on its cash position or investment programme. The book value of SNCF's assets was reduced by €9.6bn, plus €2.2bn for the TGV fleet, and €450m for stations.

SNCF invested €8.2bn in 2015 of which 70% was self-financed. Of this, €5.1bn was spent on the infrastructure with 1500 projects completed, 1014km of track upgraded, and 409 switches and crossings renovated. €3.2bn was invested in passenger services with 70% used to purchase new trains. SNCF plans to invest almost €9bn this year.

SNCF's passenger business recorded a 9% increase in revenue. TGV services achieved a 0.4% growth in traffic, and SNCF's Oui range of low-cost high-speed rail, bus, and car rental services is growing quickly, carrying a total 4.8 million passengers in 2015. This figure is expected to almost double this year to 9.2 million, with Ouigo high-speed rail services running to eight new destinations.

After years of decline, railfreight showed the first signs of recovery in France in 2015. Total railfreight operations increased by 3.4% while SNCF Fret grew by 3%.

"Transformation was our watchword in 2015, with the creation of a single unified SNCF Group," says Mr Guillaume Pepy, chairman of the SNCF executive board, and chairman and CEO of SNCF Mobility. "Despite a sluggish economic picture, the group was resilient and reported robust growth. We generated productivity gains of over €650m in 2015 while investing €8.2bn."

"Together we have built an industrial champion that will make the French rail network one of the safest, most reliable in the world, built on efficiency and innovation, which means making commuter network maintenance and upgrades our top priority," added Mr Jacques Rapoport, deputy chairman of SNCF's executive board, and CEO of SNCF Network.

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