Hovedstadens I Letbane Hovedstadens / S Letbane I/S Annual Report 2018 Annual Report 2018 Annual Report 2018 Contents Management’s Report 05 Company Management 23 Foreword 05 Compliance and CSR Report 24 Corporate Governance 24 Key Figures for Social Responsibility 24 Greater Copenhagen Light Rail 06 Employees 25 Board of Greater Copenhagen Light Rail 26 Results and Expectations 08 Attendance of Board Meetings 29 Result for the Year 08 Former Members of the Board 30 Development in Equity 09 Greater Copenhagen Light Rail’s Capital and Long-Term Finances 10 Executive Management 31 Investment in the Light Rail 11 Risk Management 14 Annual Accounts 35 Accounting Policies 36 Hovedstadens Letbane I/S Approval of the Project 15 Profit and Loss Account 39 Metrovej 5 Changes to the Project 16 Balance Sheet 40 DK-2300 Copenhagen S CVR number: 36032499 Statement of Changes in Equity 42 T +45 7242 4500 Status of the Work on the Light Rail 18 Cash Flow Statement 44 E [email protected] Project Communication 20 Notes 45 Read more about Greater Copenhagen Utility relocations 20 Light Rail at dinletbane.dk Expropriations 20 Endorsements 59 Traffic Challenges 21 Management Endorsement 59 Layout, e-Types Printing, GraphicUnit ApS Safety on the Right Track 22 Independent Auditors’ Report 60 ISBN number: 978-87-92378-37-8 Appendix to the Management’s Report 65 EMÆR AN KE V T S Long-Term Budget 66 Tryksag 5041 0473 3 At Glostrup Station, the Light Rail runs down Annual Report 2018 Management’s Report and turns in a loop, allowing easy access to change to a train or bus. Management’s Report Foreword Rail projects in Aarhus and Odense, respect- ively. The Danish State nonetheless maintains 2018 was the year in which the Light Rail the required contributions to the project. project was finally approved by the owners, so that Greater Copenhagen Light Rail could At the beginning of 2018, the time schedule sign contracts with the five winning contra- for the Light Rail project was revised, so that ctors, as well as the operation and main- the opening date was moved from 2024 to tenance operator, for the Light Rail project: 2025. The revision of the time schedule was Aarsleff, CG Jensen, M.J. Eriksson, Siemens related to the fact that a number of expro- and Aarsleff Rail, as well as Metro Service. priation days had to be cancelled and res- The contracts were signed in March, after cheduled to a later stage of the project as a which the contractors started on the de- consequence of the longer process for the tailed design of the 28-km Light Rail and the owners’ approval of the Light Rail. 29 stations extending between Lyngby in the north and Ishøj in the south. In 2018, the invitation to tender for the Light Rail construction and operation contracts While the detailed design was being pre- showed an increase of DKK 725 million in the pared, the preparatory work to realign utility total capital expenditure. In this context, lines was visible at several places along the the company's Board of Directors decided to Ring 3 line. hedge the interest rates for up to two thirds of the company’s expected realised net debt. After the summer holidays, the first con- The hedging of interest rates reduced the struction machines arrived at the forth- company's financing costs by approximately coming Control and Maintenance Centre, DKK 1 billion. It was therefore not necessary to and the first green construction signs, signal- use funds from the allocated adjust ment re- ling ongoing work on the Greater Copenha- serve to cover the higher capital expenditure. gen Light Rail, could be seen on the streets. Thank you to all partners and employees. Concurrently with the preparatory work and the construction activities, Greater Copenha- We hope you enjoy reading the report. gen Light Rail was in dialogue with hundreds of residents along the forthcoming new line. Jakob Thomasen Municipal residents’ meetings, expropriation Chairman of the Board transactions with affected neighbours and dialogue with the press all increased the ge- Henrik Plougmann Olsen neral public’s awareness that the Light Rail is CEO on the way in Ring 3. At year-end 2018/19 , the Danish State with- drew from the Greater Copenhagen Light Rail, just as it did from the other two Light 5 Visualisation: Gottlieb Paludan Architects. Annual Report 2018 Management’s Report Annual Report 2018 Management’s Report Establishment of contracts Key Figures for In 2018, Greater Copenhagen Light Rail signed contracts with: 3 1 1 Greater Copenhagen Construction Supplier of trains Operation and contractors and railway maintenance operator Light Rail Investment (DKK million) Long-term budget (DKK million) A Light Rail train can carry around 260 passengers. Capital expenditure This corresponds to around four city buses. 5,726 Budget (2018 prices) 84 -4,440 184 Operations-related capital investments 1,478 Budget (2018 prices) Total 7,204 Total budget (including adjustment Traffic monitoring reserve at 2018 prices) 2014 2025 2059 Greater Copenhagen Light Rail monitors traffic and provides traffic information Over updates along Ring 3. The Light Rail will run The Light Rail will have every five minutes 29 stations along the 28- 60 sensors during daytime hours, km line. Two extra trains and every ten minutes have been purchased, and 4 counting in the evenings and on so that now 29 trains will 29 Sundays. serve the line. radars 28 have been set up on the line. 6 29 7 Annual Report 2018 Management’s Report Annual Report 2018 Management’s Report Development in equity The decline in equity is in accordance with expectations and the assumptions made Results and expectations Hovedstadens Letbane I/S was established on the establishment of the company. As on 19 June 2014. The Danish State, repre- a consequence of how, in March 2018, the sented by the Danish Ministry of Transport, company entered into contracts for the Building and Housing, the Capital Region major construction work, in 2018 the com- and Lyngby-Taarbæk Municipality, Gladsaxe pany recognised a liability in the accounts Municipality, Herlev Municipality, Rødovre equivalent to the negative value of the cash Municipality, Glostrup Municipality, Alberts- flows from the project. This affected the lund Municipality, Brøndby Municipality, operating result significantly in 2018, and Høje-Taastrup Municipality, Hvidovre Mun- the contributed equity has been allocated icipality, Vallensbæk Municipality and Ishøj as a consequence. Municipality contributed DKK 3.5 billion on Result for the year market value adjustments of loans and in- the company's establishment. The com- Hovedstadens Letbane I/S is a partnership in terest rate agreements. pany's accounting deficit of DKK 4.5 billion which the owners are 100 per cent liable for The result for 2018 was Greater Copenhagen Light Rail will not have has been deducted from equity, which, as the company. Any negative equity capital in “ any passenger revenue until the Light Rail The provision amounts to DKK 4.0 billion and planned, was negative at DKK -1.1 billion at the company would thus not as such entail a in accordance with opens. is a consequence of how, in March 2018, the the end of 2018. need for further contributions from the ow- company entered into contracts concerning ners, since Hovedstadens Letbane I/S would expectations. During the first years, the company's ac- the major construction works for the Light After market value adjustments, the com- still be able to service its debt as planned. counts will therefore show a deficit, due to Rail in Ring 3, imposing the obligation on the pany's adjusted equity was negative at DKK the significant investments in the construc- company to achieve the project – and there- -1.0 billion at the end of 2018. The market tion of the Light Rail, without any passen- by the payments. The market value adjust- value adjustment entailed book expenditure ger revenue. ment can be attributed to the company's fi- of DKK 75 million. nancial agreements concerning interest rate The company's finances are planned on the hedging and represents expenditure of DKK basis of this strategy, which was also applied 75 million, as a consequence of the decrease to the Great Belt Fixed Link, the Øresund in interest rates after the agreements were Fixed Link, the Copenhagen Metro and the entered into and up to the end of 2018. The Equity Fehmarn Belt Fixed Link. regulation is solely an item registered in the (DKK million) accounts since debt commitments are as- The result for 2018 was in accordance with sessed at fair value. The regulation does not . 3,424 3,332 3,193 expectations. have any cash-flow effect since the agree- 3,065 3,035 ments are expected to be maintained until . As planned, the accounting result for 2018 their maturity. is a deficit of DKK 4.5 billion. The result is . influenced by the provision for the con- struction of the Light Rail, and also by . -. -1,054 -. * *Opening balance sheet, 1 January 2014 8 9 Annual Report 2018 Management’s Report Annual Report 2018 Management’s Report Capital and long-term finances that minimises the long-term financing Investments in 2018 Investments at 31 December 2018 Total budget (2018 prices) costs, with due consideration of financial (DKK million) (DKK million) (DKK million) Hovedstadens Letbane I/S prepared an up- risks. Financial management within the stra- dated long-term budget in December 2018. tegy adopted by the Board is undertaken by The long-term budget presents the expec- Sund og Bælt Partner. This is laid down and tations of the long-term economic develop- described in Greater Copenhagen Light Rail’s ment in the company.