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ITALIAN State Railways (FS) has reported €10.8bn in revenue for 2020, down 12.8% from €12.4bn in 2019, with the reduction attributed to the Covid-19 pandemic. FS says that if the impact of the pandemic was discounted, the result would have been largely positive and in line with previous years.
Following the decline in revenue, Ebitda decreased by 37.4% from €2.6bn in 2019 to €1.6bn in 2020, with the Ebitda margin consequently decreasing from 21% to 15%. As a result, Ebit decreased 133.5% from €829m in 2019 to a loss of €278m in 2020, including a negative impact from coronavirus of €999m. The net result for the period fell 196.2% to a loss of €562m.
Revenues from transport services dropped by €2.5bn to €5bn, of which €2.3bn was due to the pandemic. All transport divisions were negatively affected, with revenues from long-distance and commuter rail passenger services falling by approximately €2.4bn, while road passenger transport and rail freight revenues dropped by €101m and €75m respectively.
“This overall decrease in transport revenues during the year was clearly a direct consequence of the health emergency and the restrictions imposed on the mobility sector, particularly in the lockdown phase, with demand down 67.9% over the year for Trenitalia’s long-distance market and a reduction of 61% in saleable seat-km for regional transport,” FS says. “The reduction in traffic due to the Covid-19 emergency resulted in a significant drop in passenger-km (-55.3%) with a production decrease in terms of train-km of -14.9% compared with 2019.”
Operating costs for the period dropped by 6.2% to €9.2bn, largely due to the robust cost-saving actions implemented by FS management during the lockdown period and subsequent months.
The results include the €953m in compensation provided by the Italian government through the “Relaunch” and “August” laws, to mitigate the negative effects of the pandemic. However, not all contributions are included as the funding for the long-distance passenger business for the second half of the year and for the freight business for the full year, worth €406m, is still subject to approval by the European Union.
FS maintains a strong financial position, with equity exceeding €41.4bn at the end of 2020. At €8.9bn, the Net Financial Position (NFP) increased by just over €1.2bn compared with December 31 2019, with the NFP/equity ratio at 0.2.
The number of employees in the group decreased from 83,764 to 81,409, mainly due to changes in the scope of operation.
The group’s technical investments amounted to €9bn (98% of which is in Italy), up 5% compared with 2019, with more than €7bn spent on rail and highway infrastructure. FS also ensured financial support for the construction and procurement sector by providing €1bn in advances to suppliers, compared with €400m in 2019.
The economic value created by FS, largely through operating costs and employee wages and benefits, was €9.6bn. FS’ activities and investments directly and indirectly contributed to a 2.4% growth in Italian GDP, generating an equivalent employment impact of 260,000 jobs.
FS, which plans to become carbon neutral by 2050, says it has continued to reduce its emissions, taking into account the reduction in operation due to the pandemic. The group has received an “A-” rating from the Carbon Disclosure Project.
Last year, the group established a programme to establish the long-term risks posed by climate change and is planning to adapt projects in line with the European Green Deal.
FS adds that it is well placed to respond to the changing travel habits as a result of the pandemic.
“Covid-19 unquestionably represents a disruption that is unprecedented at domestic, European and world level, with a significant impact on the transport sector, which will therefore undergo a structural change in its value system and journey habits,” FS says. “In this context, the history of the FS Group is a solid base on which to produce leverage to gain new direction in its future development, so that it can respond resiliently to the change, and contribute to a collective mobility system that is increasingly safe and sustainable and which creates financial, social and environmental value.”
FS also issued its third green bond in March, for a nominal value of €1bn with a seven-year maturity. The coupon has been set at 0.375%, with the transaction representing the largest green bond issued so far by FS and the lowest coupon ever for a public issuance by FS.
Total orders reached roughly €1.75bn from around 90 investors, with a strong demand from Italy and 35% from abroad.
The post FS reports 12.8% drop in revenue in 2020 appeared first on International Railway Journal.
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