VR Group's operating profit increased substantially

04.08.2017 13:23 News, Press releases
  • VR Group’s operating profit in the January to June period was EUR 36.8 million and improved from the EUR 1.2 million in the previous year.
  • In passenger traffic, the number of journeys made in long-distance trains has grown sharply, on average 9.5 per cent. The filling rates have grown record high especially on the main routes.
  • VR Transpoint’s transport volumes increased by 5.3 per cent from the comparison period and totalled 21.5 million tonnes.
  • At VR Track, the construction phase of the Tampere tramway alliance was launched, and the consortium consisting of VR Track, Ramboll and Sito was selected for the design of Raide-Jokeri in the capital region.

– It is wonderful to see that the Group’s net sales are growing well after several years of declining net sales. All business operations have increased and improved their operating profit during the first half of 2017, says Rolf Jansson, President and CEO.

Passenger numbers in long-distance traffic continued strong growth, which was 9.5 per cent. The growth in domestic long-distance traffic was 8.8 per cent. The number of journeys in market-based traffic grew by more than 11 per cent, on the main routes even more than 20 per cent. The filling rate for market-based traffic was 43.3 (38.0) per cent. In June, VR added 45 new weekly train services in long-distance traffic.

VR Transpoint’s transport volumes increased by 5.3 per cent from the comparison period and totalled 21.5 (20.4) million tonnes. In addition to the increased volumes, the active development of business concepts with current and new customers has made it possible to improve competitiveness.

VR Track’s net sales grew by 5.5 per cent from the comparison period, producing a total of EUR 131.3 (124.5) million. The Tampere tramway alliance and the renewal of the safety equipment on the railway line between Riihimäki and Tampere were the most important construction projects launched.

The Group’s operating profit improved considerably

VR Group’s profitability improved significantly. Net sales between January and June were EUR 601.4 (562.7) million, representing an increase of 6.9 percent from the previous year. Operating profit for the period was EUR 36.8 million; an improvement on the previous year of EUR 35.6 million. Passenger Services recorded an operating profit of EUR 24.7 (-2.6) million.

Number of journeys on VR’s passenger services increasing

Net sales for passenger services were EUR 271.2 (243.0) million, which represents a drop in net sales of 11.6 per cent during the January to June period. The increase in net sales was mainly the result of the higher passenger numbers in domestic long-distance traffic.

A total of 63.5 (56.4) million journeys were made by rail and road. The number of journeys in the January to June period increased by 12.6 per cent compared to the same period last year. The number of road transport trips increased by 35.1 percent and the number of journeys completed by rail by 3.7 per cent. The number of long-distance journeys went up by 9.5 per cent and commuter trips by 2.7 per cent.

The first travel chain pilots in long-distance traffic in cooperation with Turku and Tampere public transport services were launched. Avecra, which is responsible for the restaurants on board the trains and at stations, was transferred fully to VR and the pilot version of the renewed restaurant cars started to operate. A significant service model reform was implemented in local traffic when ticket sales ended on board the trains in both HSL’s and VR’s commuter services areas.

The operating profit of passenger services was EUR 25.7 million in the period reviewed and saw a marked increase over the reference period (EUR -1.2 million).

VR Transpoint’s transport volumes increasing steadily

VR Transpoint’s net sales were EUR 194.9 (190.4) million in the January to June period, marking an increase of 2.4 per cent from the comparison period. The operating profit improved and was EUR 16.7 (14.2) million. Transport volumes increased by 5.3 per cent from the comparison period and totalled 21.5 (20.4) million tonnes.

The recovery of industrial production in Finland and the general economic development in Finland and Russia have also contributed positively to the volume of transports at the beginning of the year.

VR Track's net sales increased

VR Track’s net sales grew by 5.5 per cent from the comparison period, producing a total of EUR 131.3 (124.5) million. The operating profit in the January to June period was EUR 0.1 (-7.7) million.

The most important events in construction during this period were the launches of the Tampere tramway alliance and the project to renew the safety equipment on the railway line between Riihimäki and Tampere. The alliance consisting of VR Track and the Finnish Transport Agency continued its work related to the transport connections for the Äänekoski bioproduct mill. In spite of the good news in construction at the beginning of the year, the volume of orders for the rest of the year is low, which is why statutory employer-employee cooperation negotiations regarding possible lay-offs were initiated.

Future prospects

The first ten Sr3 electric locomotives have begun operating in commercial traffic this summer. The locomotive procurement is part of a series of major rolling stock investments by VR Group.

The new procurement tendering process for diesel locomotives was initiated during the spring, and the aim is to arrive at decisions by summer 2018. The number of acquired diesel engines will be specified during the process.

VR and the Ministry of Transport and Communications have agreed on the content of the oblige traffic operated as part of the exclusive rights agreement for two years ahead. All of the current 531 weekly train services will remain, as will regular night trains to the north of Finland.

At the end of June, VR Group announced it was going to sell its head office located by Helsinki main railway station to the real estate investment company Exilion, which will refurbish the premises for a hotel run by Scandic Hotels. VR Group will move the operations of its head office to Western Pasila in spring 2018. The main railway station in Helsinki will remain in VR’s possession and will be developed to meet future needs in the next few years.

Net sales and operating profit for the full year are expected to improve significantly from last year’s figures. Growth will be provided particularly by domestic long-distance passenger traffic and VR Transpoint’s rail logistics.

In passenger traffic, the favourable development of passenger numbers at the beginning of the year is expected to continue. Similarly, the development of volumes at VR Transpoint is expected to remain good for the rest of the year. The transports due to begin at the new Äänekoski bioproduct mill and the prevailing period of favourable economic growth, among others, contribute to the development of volumes.

Million euros H1 2016 H1 2017 Change, %
Passenger traffic, total number of passengers 56.4 63.5 12.6
Train traffic passenger totals 40.5 42.0 3.7
Total transported tonnes 20.4 21.5 5.3
VR Group’s net sales 562.7 601.4 6.9
VR Group’s operating profit 1.2 36.8  
Related to: VR Group

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