Kansas City Southern saw record revenue in 2018

The US rail freight company Kansas City Southern (KSC) reached a record-high revenue of 2.7 billion US Dollar (2.39 billion Euros) in 2018, 5 per cent more than in the previous year. In the last quarter of 2018, the revenue accounted for 694 million Dollar.

The 2018 operating income totalled 986 million Dollar. The adjusted operating ratio was 64.3 per cent, almost the same as in 2017. KCS expects that its operational ratio may fall to 60-61 per cent in 2021.

Type of cargo

The chemical and petroleum division accounted for the largest share of freight; 23 per cent. This was followed closely by industrial and consumer products, which accounted for 21.8 per cent of the total freight. Agriculture and minerals took up 17.9 per cent, the energy sector 9.4 per cent and the intermodal sector 14.1 per cent. The automotive industry represented a 9.3 per cent share.

The operating expenses totalled 438 million Dollars in Q4 2018, plus an additional 10 million Dollars due to damage and service interruptions from hurricane Harvey in 2017. As a result, expenses were 4 per cent more than in Q4 2017.

Less than expected

“While we delivered record revenues, adjusted operating income and adjusted earnings per share, 2018 did not meet our own expectations for financial or operational performance”, chief officer Patric J.Ottensmeyer stated.

“We will implement principles of the Precision Scheduled Railroading (PSR) methodology that are most applicable to our network. We expect this focus on operational excellence and PSR principles to help drive improvement in asset utilisation, cost and capital efficiency and customer satisfaction”, Ottensmeyer explained.

Author: Jose Gutierrez

Jose Gutierrez is RailFreight's correspondent in Spain.

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