The public group has published on Thursday a net loss of 2.4 billion euros in the first six months of 2019.
Affected successively by the strike against the pension reform and the crisis of the sars coronavirus, the SNCF has suffered a heavy loss in the first half, playing rope walkers between uncertainties and the “reconquest” of passengers waiting for assistance from the State.
The public group has published on Thursday a net loss of 2.4 billion euros, compared with a modest net profit of 20 million over the first six months of 2019. “Before the strike, the SNCF group, was relatively secure in its fundamentals, with an improved operating performance and “net improvement” of its finances, says financial director Laurent Trévisani.
But the strike in December and January, it lost 1 billion euros of turnover, before the coronavirus puts almost its TGV stop in the spring.
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3.9 billion euros in lost after a health crisis
The turnover of the SNCF declined 21% to $ 14.1 billion euros in the first half. The shortfall due to the end of the strike in January is almost negligible (275 million) compared to the hole dug by the sanitary crisis ($3.9 billion).
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If Geodis has resisted, with a sales turnover in a very slight increase of 0.3%, the other components of the public group have witnessed the collapse of their income: -37% for SNCF Voyageurs (TGV, TER and the paris suburbs), -12% for Keolis (public transport), -20% for freight and 20% for the SNCF Network. The strike, the health crisis and containment have reduced the attendance of 50% in the TER compared to the first half of 2019, and 55% in the TGV, of which SNCF takes its profits. Only February has known a positive trend.
The “operating margin” – a measure favoured by the SNCF, close to the gross operating surplus (Ebitda) – was divided by 21 in one year to 136 million euros. To limit the damage, the management has launched a “plan of action exceptional and proactive” in order to find 1.8 billion euros of savings over the year (including $ 1.1 billion in the first half). This plan includes measures to reduce costs – “without touching the actual production”, and of the postponement or abandonment of some projects.
“Burn the cash”
The group has thus waived approximately 10% of the $ 5 billion investment that he had to self-finance this year, only keeping “that the investments that are strictly necessary and corresponding to (its) strategic priorities,” according to Lawrence Trévisani.
The SNCF has nevertheless been obliged to “burning cash to the tune of 2.8 billion” euros in the first half. Where a burden of debt, which has increased from 3 billion euro to 38.3 billion as at 30 June. The State had just taken $ 25 billion at 1 January. “To this day, the group’s cash position is strong and funding capacity are preserved,” insisted the executive.
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“We’re not out of the crisis,” recalled the chief financial officer. It is always necessary to “manage uncertainty”, which makes any forecast risky, for the coming months, he indicated. The SNCF will, therefore, continue to tighten the bolts, be “very selective” on investment, and nursed his cash, “without that it be at the expense of all that is vital, urgent and essential to the operation of the railway”.
“Reclaiming the pro”
For the moment, attendance is still approximately 20% lower than normal. The SNCF has launched a “plan of action commercial” with small price “to get the leisure in the train”, as it is associated to the regions to promote the TER.
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“the reconquest of The ‘pro’ (business travelers) is going to be one of our targets at the start” with special offers for traveling and casual – for those who take less than the train because of the telework -continued Laurent Trévisani. “Currently, our TGV are not sufficiently met”, he regretted.
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The SNCF will also be of interest to rail freight, in the framework of the support plan that prepares the government. The minister for Transport Jean-Baptiste Djebbari has recently announced that the SNCF would be helped “to the tune of several billion euros” by the State. “Several options are on the table : the recapitalisation of the group or the reversal of a supplementary part of the debt, for example,” he said.
