SNCF results ‘resilient’ in face of TGV decline

SNCF saw its turnover rise to €32.2 billion and operating margin increase slightly to €2.8 billion despite a worrying decline in TGV profitability.

A 1.4 per cent fall in high-speed rail income and a €1.4 billion depreciation in TGV rolling stock resulted in an overall negative net income of €180 million.

SNCF said that its high-speed TGV business has seen “a worsening in the steep decline in profitability” caused by the current economic climate and increasing track access charges.

Operating costs rose by 4.2 per cent in 2013. At the same time €2.2 billion was invested in new trains and station upgrades across the network.

Although local and regional SNCF Proximités services experienced a 1.1 per cent growth, freight continued to struggle, with a fall of 1.8 per cent freight volumes in 2013.

Guillaume Pepy, chairman and chief executive of SNCF, said: “Against a backdrop of ongoing economic crisis, SNCF demonstrated excellent resilience in 2013.

“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 our unrelenting efforts to keep costs under control helped us meet the challenge and preserve our profit margin.

“In this context, our EBITDA is up and our recurring net profit recurring net profit stands at nearly €600 million.

“Over the same period, we invested more than €2.2 billion to deliver high-quality service, in particular through the acquisition and refurbishment of rolling stock and the renovation of stations in the Greater Paris area.”

SNCF predicts a “moderate recovery” in 2014, but is cautious about stagnating passenger traffic and increasing access charges.