RENFE plans for profit in 2017

TIN news:  The national operator is expecting to make a pre-tax profit of €39∙2m in 2017, RENFE President Juan Alfaro has told MPs. For the first time since the present corporate structure was adopted in 2005, this positive result would be due to income generated by the group’s own activities.

At group level, RENFE is budgeting for total income of €3∙41bn in 2017, up 5% on the year before. Amortisation costs are expected to remain stable at €377m and finance costs are forecast to fall by 25% to €56m, well below the European sector average according to RENFE. In contrast, track access charges are expected to rise by 5∙7% to €647m due to more services being operated, which combined with an increase in electricity and fuel prices will see energy costs rising by 7% to €310m.

RENFE is planning capital spending of €461m during 2017, principally on rolling stock and including refurbishment programmes, accessibility improvements and the first payments for the 15 high speed trainsets ordered from Talgo for €786·5m in November 2016. A further €80m is to be spent on accessibility improvements at suburban stations as well as on workshops and equipment.

With traffic of 481 million passenger-journeys forecast for 2017, up by 10 million on the year before, RENFE’s passenger business is expected to record a profit of €45·4m before tax, up 15∙3% on the year before. The freight business is expected to make a loss of €1∙8m, ‘practically breaking even’ according to RENFE and a marked improvement on the pre-tax loss of €60m recorded in 2016. Freight traffic is forecast to grow by 4∙3% in 2017 to reach 19∙1 million tonnes.

RENFE’s rolling stock maintenance and assembly business is forecasting a loss of €1m on EBITDA of €22∙5m in 2017. Focusing on the freight market, the rolling stock leasing business is expecting to make a profit of €1·6m on EBITDA of €14m.