February 14, 2014

SNCF turnover and profit up slightly in 2013

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FRENCH National Railways (SNCF) managed to achieve a 0.5% increase in turnover to €32.2bn and a 2% rise in Ebitda to €2.8bn in 2013 despite a 1.8% drop in revenue from its Geodis freight business and a 1.4% decline in income from TGV services.

Current operating profit fell by €333m to €1bn in 2013, while recurring net profit dropped from €689m in 2012 to €582m in 2013. SNCF's net profit of €376m in 2012 was converted into a net loss of €180m last year.

SNCF says it saw a worsening in the profitability of its high-speed business which it first observed in 2008. This is due to the economic crisis and a steep, steady and continuing increase in track access charges. Ebitda fell from €876m to €782m last year.

Three SNCF divisions recorded increases in turnover in 2013. SNCF Proximités, which is responsible for regional passenger traffic and includes Keolis, achieved a 1.1% rise to €11.96bn. SNCF's infrastructure and engineering division saw a 4.2% increase in turnover to €5.52bn, while revenue at stations and connections grew by 8.5% to €1.18bn.

SNCF invested €2.24bn in 2013, but with the addition of projects funded by regional authorities, total investment reached €3.17bn of which 66% was for new rolling stock, and 34% for workshops and stations. Net financial debt fell from €7.52bn in 2012 to €7.39bn in 2013.

"Against a backdrop of ongoing economic crisis, SNCF demonstrated excellent resilience in 2013," says SNCF's chairman and CEO Mr Guillaume Pepy. "Given limited growth in public transport delivered under agreements with local and state authorities, a slight decline in high-speed passenger service, and the recession in freight transport at the outset of the year, our unrelenting efforts to keep costs under control helped us meet the challenge and preserve our profit margin."

As far as 2014 is concerned, SNCF says: "After marking time in 2013, the economy shows signs of a moderate recovery shaping up in 2014, but the business outlook is tempered by severe constraints." Public funding is under increasing pressure, VAT on passenger tickets will be increased from 7% to 10%, corporation tax is set to increase from 36.1% to 38%, and track access fees will rise by 4.8%. "As a result, 2014 projections call for freight volumes to stagnate and passenger rail travel to rise slightly or even contract a little (-0.3%) for the SNCF Voyages division."

Nevertheless SNCF aims to increase revenue by 2% mainly through its infrastructure division and Keolis, and it plans to invest €2.3bn while cutting costs by €350m.

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