Lineas might break even again by the end of 2024
After undergoing a major restructuring at the beginning of 2022, things seem to be looking better for Belgian private rail freight operator Lineas. The company is expecting to break even once again at the end of 2024 after having a negative EBIT of -78 million euros a year ago. This, as Lineas highlighted, would mean that the company would be back on track a year earlier than they thought. However, the company still needs 80 million euros in resources to fully implement its new strategy and get properly back on track.
The company had a somewhat sudden change of CEOs in February 2022, when Bernard Gustin replaced Geert Pauwels due to poor financial performance, also connected to the COVID-19 pandemic. Under the new leadership, Lineas implemented overhead costs, paid all its bank debts, and decided to discard loss-making products such as the Green Xpress Network and other “unprofitable contracts”. Moreover, the company reorganised its single wagonload business, which within a year broke even again.
Another shift caused by the restructuring is that Lineas “refocused on a reduced number of attractive corridors and targeted profitable activities outside these corridors”. Moreover, the Belgian company invested in digitilisation to increase customer satisfaction. For example, the company launched its own MyLineas app, through which customers can book services as well as track their cargo. Lineas also launched a new initiative called the Godparent Programme where C-level leaders at the company establish a stronger relationship with a group of customers.
A positive 2023 for Lineas
Signals of the Lineas’ rebirth have been visible since the beginning of the year. In March, the company launched a new service along the TEN-T North Sea-Mediterranean Corridor, from Ghent to Lyon. In May, Lineas secured 20 million euros from French investment fund Argos Wityu, which owns 90 per cent of the shares in the company, and the Belgian government to implement the new strategy. The company indicated it needs 100 million in total and it is still looking for a third stakeholder to fill the 80 million gap. Additionally, in June, Lineas merged its Dutch legal entities under a new brand: Lineas Nederland B.V.