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ČD Cargo in the first half doubled its net profit before tax grossed over half a billion crowns

ČD Cargo, a. s., a member of the ČD group and the largest subsidiary of ČD, a.s, which is mainly engaged in freight transportation defended its position as the biggest freight carrier in the domestic railway market and for the first half of 2016 realized a pre-tax profit according to international accounting standards (IFRS) of EUR 507 mil. CZK.

In the consolidated results of ČD freight segment then contributed a net profit after tax of CZK 427 mil., And also thanks to the successfully initiated expansion abroad. For the first half of this year transported ČD Cargo, Inc., 32.1 million tons of goods.

Liberalisation of the railways opened up the market to private operators, partly globalization blurs the boundaries between countries, and it brings with it the natural decline in market share ČD Cargo. The time when ČD Cargo clearly dominated almost 100% share of the domestic market is forever gone. Market share and now hover around 65%. “I am very pleased that we have clearly demonstrated that this decline in the domestic market, we can advise. New pro-customer approach, information services and numerous optimization measures, which the company has undergone and is still undergoing under our control, it is worth all the good results in half of this year. One of our primary goals is to stop the decline in performance on the domestic market and seize opportunities in markets abroad. Yes, ČD Cargo now affects not only the domestic transport market. We are fully entrenched in Poland and the necessary legislative steps to obtain a carrier license do business in other neighboring countries,” notes Chairman of ČD Cargo, a.s., Ivan Bednárik.

ČD Cargo continues a series of sub-optimization projects and actions that led to a rapid reduction in operating costs. Higher efficiency of the carrier contributed to a significant improvement in annual profit ČD Cargo group for approximately 211 millions CZK, which with regard to last year's net profit for the first half of the year represents an increase of almost 98% on the above CZK 427 mil.

Ivan Bednarik adds that: “First half results are very positive. We must not be complacent them. There is still room for improvement. We now focus mainly on the problematic segment of the single wagon load, due to the development of ČD Cargo also undergone restructuring in recent years. Situation in single wagon load, however, again complicated the drop in oil prices, which caused a shift of transportation on the road. However, we agree with the Ministry of Transportation that these shipments were to remain, respectively, go back to rail. This effort was also supported by an increase in rebates for the use of railway infrastructure for this product, but a balanced economy segment of individual shipments, unfortunately, not enough. But we are preparing a number of measures which I firmly believe will help improve the economy in this area of our business."

Transport of single wagon load rail is difficult for capacity usage and economically unprofitable compared to the transport of block trains, and that´s why is in the Czech Republic operated almost exclusively by ČD Cargo only.

Direct competitors are only road carriers, whose quotations are not often able to compete by the railroad. "The extreme solution would be to leave this segment for the road carriers, which would shift further to about 21 million tons of cargo, which would have a negative impact beyond the borders of our society. In ČD Cargo, but we will do everything to make this move happen, "assures Ivan Bednarik.



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ČD Cargo Logistics

ČD Cargo

It offers the transport of a wide array of goods ranging from raw materials to products with a high added value, transport of containers, special consignment, rental of railway wagons, railway siding services, and other transport services.