Restructuring: Hope at ÖBB
In 2010, Austrian Railways recorded losses of € 330m. CEO Kern could decrease losses to € 28m in 2011. The final turnaround is not achieved yet, Kern says.
Last year, Austrian Railways could improve its results substantially. Nevertheless, the loss zone is not left yet. In 2011, the state-owned railway company recorded losses of € 28m after € 329m in 2010. The major part of the recovery was due to the improved business situation in ÖBB´s freight division RCA (Rail Cargo Austria). Even Rail Cargo Hungaria (RCH) showed slight operating profits. Even the loss-making Rail Cargo Hungaria showed slight operating profits.
CEO Christian Kern warns: “We did not achieve the final turnaround yet.” In 2012, Austrian Railways is not expected to register profits. Kern wants to reach “zero losses”. At least, losses should be reduced further. “The cost cut program must be continued consequently as further reform steps are more difficult than the previous ones.” Above all, one-time effects caused the improvement in ÖBB´s results. In 2010, RCA recorded massive write-offs. The Hungarian subsidiary RCH caused write-offs of € 300m. Nevertheless, RCA still registered losses of € 48.6m. RCA´s revenues were up by 4.0% to € 2.51bn.
Revenues reached € 6.25bn, which is a new record figure. In 2010, revenues accounted for € 6.1bn. Operating results from the three divisions are all positive, Kern emphasized. In 2015, profits of € 150m should be achieved. Within the next four years, costs must be reduced by € 310m in order to reach that target. Kern wants to prevent a further reduction of the “thin equity base”. Besides that, staff will be reduced further.