Business News

Railways Operator Halves Operating Loss in 2010

Ljubljana, 19 January (STA) - Slovenian railways operator Slovenske zeleznice halved its operating loss in 2010 to EUR 10.5m, while overall loss stood at EUR 20m, according to first estimates. Plans for 2011 envisage an operating loss of EUR 4.9m, but the management hopes to break even already this year, although this is projected for 2012.

In the first eleven months of 2010, the company made an operating loss of EUR 2.14m and an overall loss of EUR 8.13m, while operating revenues were 3.2% better than planed.

Cargo transport in this period was 17.2% higher year-on-year and 11.6% better than planed, but passenger transport fell by 1% year-on-year and was 4.8% below plans.

According to the state-owned operator's general manager Goran Brankovic, the 2010 loss was strongly affected by EUR 8.5m in currency differences between the euro and the Swiss franc, and by EUR 9m in loan interests paid.

The troubled company meanwhile improved its financial flow by EUR 30m in 2010 and has managed to get by with a EUR 22m in new loans instead of the envisaged EUR 57m.

Slovenske zeleznice repayed EUR 12m in principal sums in 2010, but will have to repay another EUR 25m in rpincipal sums and EUR 11m in interests this year.

Brankovic further said the company managed to reduce labour costs by 1% so they fell under 50% for the first time since Slovenia became independent in 1991.

The number of employees was reduced by 830 or around 12% last year, however, Brankovic noted this was carried out with no major social shock and added that a further reduction by 200 is expected in 2011, while more would not be possible.

In the framework of the ongoing financial consolidation of the loss-ridden railways operator, its boss pointed at a EUR 134.4m claim towards the state for using cargo traffic funds for infrastructure, which has been established by a special audit.

Registering the claim is meanwhile also a condition for implementing a bill on Slovenske zeleznice this year, which reorganises the operator into a holding.

Chief supervisor Igor Zajec told the press after a meeting of the supervisory board on Wednesday that he was glad the state - the owner of the railways - had realised that a modernisation of the railway infrastructure in Slovenia was necessary.

However, he said that Slovenia did not only need certain second tracks, but all the necessary infrastructure on the Pan-European transport corridors V and X, the latter being economically more important for the country, according to Zajec.

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