Results : the SNCF found the growth in the 1st half

The turnover of the SNCF group is growing by 3.7%, to $ 16.6 billion, and the margin increased also by 16% to € 1.9 billion.

“The operating margin had been really catastrophic in the first half of 2016, since there had been bombings, floods, strikes. It was roughly 4%, it was a low point in history. Today it is 12.5 per cent”, said to AFP the president of the SNCF, Guillaume Pepy.

The SNCF also announces 400 million euros of productivity gains in these six months, more than half of the annual target of 670 million.

Traffic TGV in France, the penalty for several years after having been the milk cow of the SNCF, are up 8.4% over the first six months, and the turnover increased by 5.9%.

Mr Pepy, attributes this revival to “economic growth in France, which is back”. “We used to say that when you have a point of growth, you have two points of traffic growth the TGV,” he said.

But it is also due to the new offers, TGV, and in particular to the multiplication of the small price. Thus, the supply of low-cost Ouigo, which is now going to Strasbourg and Bordeaux, has increased by 20% compared to the same period last year. The profitability of the TGV is also improving, with an operating margin around 13% of the turnover. This, however, is not sufficient to fund, inter alia, the purchase of new trains :

“the experts agree that in order for the activity to renew its apparatus of production, we need to be at around 18-19%,” detailed Guillaume Pepy.

A debt abyssal for SNCF Network

Guillaume Pepy, however, remains cautious on its outlook for the year as a whole, “because in this first half, which is a good first half, there was a correction effect compared to 2016”.

“What is certain is that in the second half, the growth may not be the same. There will certainly be progress, in any case, everything is done for, but we are going to compare to a second half of 2016, which was rather encouraging,” continues the chairman of the group.

All of the activities of passenger transport and logistics, grouped within SNCF Mobility have improved, but the basis of comparison is particularly low, since the results of the first half of 2016 had been adversely affected by the terrorist attacks, strikes and floods. The results of SNCF Mobility is improved this year, with a net profit of 338 million euros (net loss of 25 million the past year), and sales growth of 4.1%, to 15.7 billion euros. The operating margin improved also, and going from 743 million euros (4.9% of net sales) to $ 1.1 billion (7.5 per cent).

The infrastructure manager SNCF Network, on the other hand, is still in the red, with a net loss of 97 million euros, an improvement, however, compared to the first half of 2016. Its sales have grown by 0.8%, to $ 3.2 billion, and its debt is widening again, to $ 46 billion. During these six months, 2.3 billion euros have been spent to modernise and renovate the railway network, of which 1.6 billion financed by the SNCF Network. The performance contract signed in April with the State, and plans to 10 years in investments, plans to spend € 34 billion between 2017 and 2026.

(with AFP)

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