€67.6 million profit last yea
VR Group's Board proposes paying a dividend of EUR 100 million to the state. Turnover and profit in passenger traffic reflects a changed market situation
- The result of VR Group was strong in 2014 in spite of a challenging economic situation. In spite of the decline in turnover it was possible to improve profitability thanks to cost-effectiveness", says CEO Mikael Aro.
Operating profit and market share of VR Transpoint grew. VR Track considerably improved profitability
- Increasing turnover is very challenging in the current economic situation and under conditions of tougher competition. The situation of VR Transpoint looks especially weak early in the year, and we have already taken measures to adjust. I expect our operating profit to weaken this year", CEO Mikael Aro observes.
The year 2014 was a time for big investments and improved efficiency, VR Group declared.
The funding of investments requires, according to company, sufficient results from business operations, as well as greater efficiency from the whole group. In passenger transport, commuter services were formed into a separate profit centre. Finrail Oy, which is responsible for traffic control, passenger information, and planning services, was separated from the VR Group to form an independent state-owned company as of 1.1.2015.
The VR Group's comparable turnover fell 2.3 per cent. The Group's operating profit was EUR 90.4 (70.6) million.
Extensive measures to improve profitability, which were announced in May 2013, led to improvements in efficiency worth EUR 16 million by the end of 2014. The comparative turnover of VR Group declined from the previous year, but the operating result improved. Turnover improved for VR Transpoint and VR Track, and passenger transport reached the levels of the previous year.
The group's turnover in 2014 was EUR 1, 3672.2 million (EUR 1,437.8 million in 2013). Comparability with the previous year is weakened by the sale of Corenet. The comparable turnover declined by 2.3 per cent from 2013.
The Group's turnover was EUR 90.4 (70.6) million and profit for the fiscal year was EUR 67.6 (65.3) million. Turnover of the fiscal year includes profits on the sale of property, whose impact on operating profit was EUR 23.9 (19.0) million. Operating profit excluding non-recurring items improved over 2013 mainly thanks to measures to improve efficiency.
For 2014 the Board of the VR Group proposes a dividend of EUR 100 million. In 2013 the VR Group paid EUR 30 million in dividends. The VR Group is a 100 per cent state-owned company.
Turnover in passenger transport fell under last year's level. The development was affected by the overall economic situation, weakened employment, and tougher price competition in long-distance services. In the early part of the year, services to Russia continued their strong growth, but from the spring, passenger numbers for Allegro showed a clear decline with the weakening of the rouble.
Turnover for VR Transpoint was EUR 435.3 (441.9) million, and it declined by 1.5 per cent from 2013. Operating profit for VR Transpoint was EUR 24.9 (13.0) million.
Total transport remained at the same level as the previous year, totalling 42.2 million tonnes. Total volume of rail logistics was 37.0 million tonnes, increasing by 1.8 per cent from the previous year. The amount of domestic transport remained nearly unchanged, eastern transport grew by 4.7 per cent. The market share of rail logistics reached 28.2 per cent in 2013 and the increase in total volume means that the market share continued to grow in 2014.
Turnover in railway logistics grew by 0.8 per cent, but turnover in road services declined by 8.3 per cent over the previous year.
VR Track improves profitability
The turnover of VR Track was EUR 314.0 (340.3) million, going down by 7.7 per cent from 2013. Turnover went down especially in construction. This was mainly the result of a decrease in government funding of track maintenance and increased competition. Growth in Swedish operations continued.
VR Track's operating profit was EUR 17.3 (8.3) million. Profitability improved in nearly all business operations. Machinery business operations split off to form a separate business operation in early 2014.
Source: VR group Press release
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