Renfe Mercancías cuts losses by 46.5 per cent
Renfe Mercancías, the rail freight subsidiary of Spanish National Railway Company Renfe, witnessed a significant improvement of business results in the first half of 2017, compared to the same period last year. The company reported a loss of 12.5 million Euros, as compared to a loss of 23.4 million Euros in the same period of 2016. This indicates an improvement of 46.5 per cent.
Renfe Mercancías announcced that it had carried 9.9 million tonnes of cargo in the first half of 2017, a 10 per cent increase compared to the same period in 2016. As a result, its income amounted to 114.31 million Euros, 2.7 per cent more than the previous half-year period. Operational costs decreased by 5 per cent.
Considering the Ebitda (Earnings Before Interest, Taxes, Depreciation and Amortization), the first six months of 2017 resulted in 0.2 million Euros, as compared to a loss of 9.5 million Euros in the same period of 2016. Ebitda is a particular method of assessing a company’s financial strength often used in valuation ratios.
These business results are the outcome of management decisions taken in line with Plan 2017-2019. The tactical objectives of this plan are increasing international activity, focusing on the most profitable activities and cutting down operative costs. Renfe wants to slim down its staff with 300 workers (25 per cent) and sell 73 locomotives and 1,600 wagons. The staff adjustment is in an advanced stage, after 250 workers having accepted a change of position in several Renfe’s subsidiaries.
The main objective of Plan 2017-2019 is to achieve positive business results in order to be competitive, and eventually, be attractive as a partner to international multimodal rail freight companies. The Spanish Government is due to start assessing potential candidates on Renfe’s behalf in November, before a partnership agreement is signed towards the end of next year. Renfe Mercancías tried to find new multimodal partners in 2016 but the results were not satisfactory.