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Warsaw, 27 August 2015
PRESS RELEASE
156 million PLN of net profit of PKP CARGO Group
as a result of consistent optimization and purchase of AWT
The takeover of the Czech carrier AWT positively affects financial results of PKP CARGO
Group. As a result of the acquisition, the company booked a profit on a bargain purchase
in the amount of 140 million PLN. The effect of the purchase of AWT, active sales policy,
dynamic development on international markets and improvement in operational and cost
efficiency of PKP CARGO Group enabled development of a net profit in the first half of
2015 in the amount of 156 million PLN, in revenues amounting to 2.1 billion PLN. The
financial results for the first half-year are better than the market expectations.
In the first half-year, the railway services market in Poland recorded a zero growth dynamics as a
result of, among others, the situation on the market of building materials and aggregates and the
factors restricting the size of exchange of goods of Poland with the East.
In view of the stagnation on the domestic market, PKP CARGO Group actively develops international
transport operations. In the first half-year, in the annual perspective the international traffic of the
company increased by 136 percent, reaching almost 3 million tons. PKP CARGO trains run, among
others, to the ports of the North Sea, the Netherlands, Germany, Austria and Hungary, as well as
Czech Republic and to Slovakia.
The development of PKP CARGO on foreign markets is supported by the acquisition of AWT.
Transaction finalized in May 2015 is substantially reflected also in company's financial result, bringing
PKP CARGO a profit on a bargain purchase in the amount of 140 million PLN confirmed by expert
auditors. This means that PKP CARGO bought AWT for a price lower than the evaluation of assets of
the company taken over would indicate. The synergies are mainly a better organization of transport
process and effective use of the rolling stock, mutual repairs and inspections of cars and locomotives,
as well as joint commercial actions in the region of South-Eastern and South Europe.
Aiming at the improvement in financial effectiveness, PKP CARGO Group still reduces operating costs.
The voluntary leave programs conducted in the first half of 2015 will bring savings at the level of at
least 120 million PLN annually. The company's operations costs in the first half of 2015 decreased by 5
percent in the annual perspective - to 1.83 billion PLN.
PKP CARGO prepares a new strategy of operation for 2016-2020. The company will concentrate on
international development and continuation of initiated consolidation processes of different business
areas with particular focus on forwarding and terminal operations. The reorganisation of structures of
sales in the Group will improve acquisition of and customer service, both in the domestic and
international market. The sale of all transport - logistic services provided by PKP CARGO Group will be
handled by the PS Trade Trans company, led by a new president, Twan Steenweg, a specialist in the
field of logistics with 25 years of the international experience.
- The acquisition of the Czech carrier has consolidated PKP CARGO Group. A good preparation of
transaction and accurate recognition of synergies resulting from the acquisition starts to show results.
Thanks to that, the integration of AWT and PKP CARGO has already given numerous benefits to the
company, employees and shareholders. The takeover of AWT and obtaining the possibility of dynamic
development of operations in Europe opens a new chapter in the history of PKP Cargo Group. Right
now with our offer and our trains we are strongly present in Hungary, Slovakia and in the Czech
Republic - says Adam Purwin, President of the Management Board of the PKP CARGO Group.
PKP Cargo S.A., ul. Grójecka 17, 02-021 Warsaw
KRS 0000027702, District Court for the capital city of Warsaw in Warsaw, 12th Commercial Department, REGON 277586360,
NIP (Tax Identification Number) 954-23-81-960, The share capital of the Company: 2 239 345 850.00 zł, paid in full. www.pkpcargo.eu
The surge in traffic abroad, reflection in the basic segments in the country
In spite of a difficult market, in the first half-year, PKP CARGO Group improved traffic results. In the
annual perspective, the transported mass increased by 2 percent and the traffic work by 0.3 percent.
International traffic strongly increased. the In the first half-year, PKP CARGO transported outside of
Poland nearly 2.9 million tons of goods (increase by 136 percent year-to-year), performing 380 million
tkm (increase by 88 percent year-to-year). At the same time to the previous year the traffic in the
country remained at a similar level. The traffic counted by mass, amounted to 49.3 million tons
(decrease by 1 percent year-to-year) and with traffic work 13.38 billion tkm (decrease by 1 percent
year-to-year). At the end of June, the share of PKP CARGO Group in the market of freight service in
Poland amounted to 56.1 percent in traffic work, hence it remained at an unchanged level.
In the second quarter of 2015 the improvement was observed in transport of coal, having the greatest
share in freight services. During this period PKP CARGO observed an increase by 17 percent in the
annual perspective in traffic work. Throughout the first half of the year it means an increase by 11
percent, (5.6 billion tkm) as compared to the previous year. The reason for this revitalisation in
transport of coal was the increase in the domestic demand.
Railway carriers are still awaiting the begining of infrastructural works in Poland. The delay of
commencement of construction of new road sections (including A1, S5, S6 and S7) is reflected in
decreases in traffic of aggregates and construction materials. In the first half-year PKP Cargo
observed a decrease in traffics in this category by 12 percent year-to-year, to 2.4 billion tkm.
Thanks to the economic situation in the industry, the second quarter of the year was very good for
PKP CARGO Group in terms of traffic of metals and ores. Over this period they increased by 13
percent year-to-year, balancing the effect of a weaker first quarter. Throughout the first half-year the
traffic in the category "metals and ores" remained at the same level as the year before (1.8 billion
tkm).
The decrease in the container transhipments in Polish ports in the second quarter (-24 percent yearto-year), Russian embargo, lower demand for cars and car parts in the East has negatively affected
the dynamics of intermodal carriages. Between April and June traffic of PKP CARGO in this segment
decreased by 7 percent year-to-year, which over the first half-year means the repetition of the result
from the previous year (0.9 billion tkm). PKP CARGO expects that the intermodal transportation
performed by the company will increase in the nearest future, especially after obtaining the access to
well-located terminal in Ostawie Paskov, the expansion of the terminal in Poznań Franow and
liquidation of bottlenecks in access infrastructure to the Polish ports.
- The traffic results after the first half of the year show that the consistently implemented sales
strategy brings the expected results. Despite very demanding market, the PKP CARGO Group observes
the increase in traffic says Jacek Neska, member of the Management Board of the PKP Cargo for
commercial affairs. - At the same time it is worth paying attention to the international traffic. Its
dynamic growth reduces our dependence of the domestic market. This shows that the acquisition of
the AWT was the right step and good results of this investment are already visible adds Jacek Neska.
Higher effectiveness, mutual resources with the AWT
In the first half-year of 2015 the company managed to reduce by 6 percent the cost of access to
infrastructure (to 22.4 PLN per 1 thousand km), among others, as a result of consistent launching of
the trainsets with a greater total mass. Also the indicators of gross average tonnage of a train per
working locomotive and locomotives working time per day have increased.
- The better use of resources means not only tangible savings, but also preparation for traffic peak in
conditions of intensive modernization on Polish railway lines - says Wojciech Derda, member of the
Management Board of the PKP CARGO for operational affairs. - I am happy that integration with AWT
with regard to joint management of rolling stock, mutual repairs and inspections and optimization
transport process proceeds in line with our plans - adds Wojciech Derda.
PKP Cargo S.A., ul. Grójecka 17, 02-021 Warsaw
KRS 0000027702, District Court for the capital city of Warsaw in Warsaw, 12th Commercial Department, REGON 277586360,
NIP (Tax Identification Number) 954-23-81-960, The share capital of the Company: 2 239 345 850.00 zł, paid in full. www.pkpcargo.eu
The cars of AWT are repaired in Points of the Rolling Stock Maintenance belonging to PKP Cargo
Group, and in the Czech Republic the inspections of locomotives performing work on the territory of
southern neighbours of Poland will be made.
Acquisitions do not limit the investment or dividend payment
In the first half-year, PKP CARGO implemented investments in the amount of 231 million PLN (mainly
the rolling stock modernization projects) and settled one-time payments for shares of AWT and
voluntary leave program. Cost effectiveness enabled maintenance of good financial situation and
unused credit lines in European Investment Bank and in Bank Gospodarstwa Krajowego and the
possibility of obtaining a cheap, long-term financing provides protection of further investment process,
including potential acquisitions.
- We are intensively working on cost optimization, at the same time securing the means necessary for
further development of PKP CARGO Group. Both the present financial situation and plans of the
Management Board do not result in the need for amendment of previous dividend policy - says Łukasz
Hadyś, member of the Management Board for Financial Affairs.
After the takeover of AWT the so-called profit from bargain purchase was identified and confirmed by
an expert auditor. Value of AWT company after the takeover turned out to be higher than estimations
prepared before the transaction. The Czech carrier is worth 704 million PLN, and thanks to the
negotiated price PKP CARGO Group has gained 140 million PLN on its purchase. At the same time
AWT already contributes to the result of PKP CARGO Group.
- The takeover of the Czech carrier is also a perspective of payment dividends by him for PKP CARGO
Group and a significant improvement of result of EBITDA Corporate Group - adds Łukasz Hadyś.
The results of PKP CARGO Group after the first half of the 2015 (with the one - time factors:
Purchase of the AWT and the PDO):
Contact:
Press Office of the PKP CARGO
(+48) 663 29 07 77
[email protected]
Mirosław Kuk
Spokesperson of the PKP CARGO
(+48) 783 91 51 34
[email protected]
***
PKP Cargo S.A., ul. Grójecka 17, 02-021 Warsaw
KRS 0000027702, District Court for the capital city of Warsaw in Warsaw, 12th Commercial Department, REGON 277586360,
NIP (Tax Identification Number) 954-23-81-960, The share capital of the Company: 2 239 345 850.00 zł, paid in full. www.pkpcargo.eu
PKP CARGO Group is the leader in rail freight in Poland and the second largest operator in the European Union. It was
established in 2001. In the area of logistics services, it runs land transport operations (rail and road) and maritime operations
(ferries). It owns the largest fleet of freight rolling stock in Poland. The carrier runs a thousand of trains on average every day,
providing services to 10,000 customers. It operates its own freight cargo services in Slovakia, the Czech Republic, Germany,
Austria, Belgium, the Netherlands, Hungary and Lithuania.
PKP CARGO Group includes such subsidiaries as Cargosped (responsible for intermodal operations), PS Trade Trans (national
and international rail freight forwarding services) and PKP CARGOTABOR (one of the world’s largest freight companies).
In 2014, PKP CARGO Group generated a revenue of PLN 4.26 billion and a net profit of PLN 276 million.
On 30 October 2013, PKP CARGO was floated on the Warsaw Stock Exchange, becoming the first stock-listed rail freight
operator in the EU. The public offering, during which PKP S.A. sold almost 50 percent of shares of PKP CARGO, totalled PLN
1.42 billion. The Company is now part of the mWIG40 index. PKP S.A. remains its major shareholder.
PKP CARGO Group is active in the area of CSR. It follows the standards of responsible employment policy and carries out a
range of environmental activities. Additionally, it is a patron for railway artefacts such as those collected in Parowozownia
Wolsztyn, the only museum of its kind in Europe.
PKP Cargo S.A., ul. Grójecka 17, 02-021 Warsaw
KRS 0000027702, District Court for the capital city of Warsaw in Warsaw, 12th Commercial Department, REGON 277586360,
NIP (Tax Identification Number) 954-23-81-960, The share capital of the Company: 2 239 345 850.00 zł, paid in full. www.pkpcargo.eu