Annual report 2009 Metroselskabet PARTNERSHIP Corporate information The Corporation Board of Directors Metroselskabet I/S Henning Christophersen (Chairman) Metrovej 5 Jesper Christensen (Vice Chairman) DK-2300 Copenhagen S Jørgen Glenthøj (Vice Chairman) Birgit Aagaard-Svendsen Tel.: +45 3311 1700 Hans Jensen Fax: +45 3311 2301 Ayfer Baykal E-mail: [email protected] Birthe Skaarup Website: www.m.dk Jens H. Gravgaard Bente G. Rønnebæk Reg. No.: 30 82 36 99 Founded under the provisions of Act no. 551 of Board of Executives 6 June 2007. Henrik Plougmann Olsen Financial year: 1 January to 31 December (Managing Director) Registered district: City of Copenhagen Auditors The National Audit Office of Denmark Deloitte BDO Kommunernes Revision A/S (approved auditing company) Ownership The City of Copenhagen: 50% The Danish Government: 41.7% The City of Frederiksberg: 8.3% Table of contents 4 Preface Directors' report 6 Finances 10 Corporation management 16 Metro operations 20 City Circle Line 24 Social responsibility Financial statements: 1 January to 31 December 2009 30 Accounting policies 35 Profit and Loss Account 36 Balance Sheet 38 Cash Flow Statement 40 Notes 49 Metroselskabet, Board of Directors and Board of Executives Endorsements 52 Management endorsement 53 Independent auditor's report Appendix to the directors' report 58 Metroselskabet long-term budget 2010 PAGE 4 METROSELSKABET Preface For Metroselskabet, last year will be remembered Operation of the existing Metro returned a satisfac- as the year the work on the City Circle Line became tory profit of DKK 66 million. An improvement of DKK visible on the street. Since autumn, Kongens Nytorv 9 million compared to 2008. and Assistens Cemetery near Nørrebros Runddel have shown signs of the fact that Copenhagen is to have The Danish Broadcasting Corporation's Koncerthus 17 new Metro stations. Looking a little ahead, there opened in January, adding yet another cultural desti- will be about 16 large work sites when we reach the nation to the large selection already available to Metro end of 2010. customers. In the city, major events such as the IOC Session and COP15 Climate conference put the capi- In 2009 the Metro passed the major milestone of tal and the Metro to the test. The Metro experienced transporting 50 million passengers annually. The Met- its two busiest days ever, culminating on Friday 18 De- ro also began operating 24 hours a day, seven days a cember, where 240,000 passengers used the service. week, on 16 March, and the night tariff was abolished later in the year. Overall operational reliability for the We are very grateful to our regular passengers for the entire year was 98.6% – matching the Metro's record extra consideration and patience many showed dur- for 2008. ing these two events. We also express our thanks to Metro Service, who handled both occasions profes- sionally and without hiccup. Pleasant reading. Henning Christophersen Chairman Metroselskabet Henrik Plougmann Olsen Managing Director Metroselskabet Directors' report PAGE 6 METROSELSKABET Finances Result and change in equity for the year The result after financial items was a loss of DKK 417 Profit before depreciation and financial items million, DKK 140 million higher than in 2008. This loss for 2009 amounted to DKK 66 million. An im- arises from the book depreciation of the corporation's provement of DKK 9 million compared to 2008. investment in the City Circle Line, and depreciation of This profit relates to operation of the Metro. the existing Metro. The corporation believes this is a satisfactory result, re- flecting the fact that the Metro is an enterprise which The loss for the year of DKK 417 million has been de- annually generates funds for further investment in the ducted from equity, which amounted to DKK 9.4 bil- City Circle Line. lion at the end of 2009. Depreciation and write-downs amounted to DKK 596 As a consequence of the applied accounting policies, million, on par with 2008. The result before financial the decline in equity can be expected to continue in items subsequently amounts to a deficit of DKK 530 the coming years. Contracts are expected to be signed million. in 2010 for the construction of the City Circle Line. This means that equity is expected to be reduced to Financial items include interest revenues of DKK 160 approximately DKK 1 billion, as planned, because the million and interest expenses of DKK 17 million. In corporation undertakes a financial obligation upon addition, a market value adjustment incurred an ac- signing the contract. counting expense of DKK 30 million. The total finan- cial items amount to an income of DKK 113 million. No events of significance to the annual report for 2009 have occurred after the closing of accounts. Financial highlights DKK million 2009 2008 2007 Opening balance Net turnover for the year 722 670 480 - Result before write-downs and 66 57 26 - depreciation Depreciation and write-downs -596 -575 -230 - Result before financial items -530 -518 -204 - Financial items 113 242 53 - Result for the year -417 -277 -151 - Balance sheet total 9,691 9,950 10,323 12,797 Investment in the Metro for the 448 442 235 - year Equity 9,413 9,830 10,100 10,251 Equity ratio 97% 99% 98% 80% ANNUAL REPORT 2009 PAGE 7 Operating result for the Metro lated on the basis of the Ministry of Transport's order The result for operation of the Metro (before depre- regarding division of ticket revenue in the metropoli- ciation) in 2009 constitutes a profit of DKK 66 million. tan area. This is an improvement of DKK 9 million compared to 2008. Construction of the City Circle Line The total construction budget for the City Circle Line Income from the Metro in 2009 constituted DKK 522 of DKK 15.4 billion (2005 prices) is based on the op- million from the joint fare system, and DKK 147 mil- timised feasibility study. The construction budget has lion for leasing out the Metro, etc. Expenditure cov- been adjusted to DKK 18.1 billion in 2010 prices. ering running costs for the Metro, contract manage- ment, administration, etc. this year came to DKK 604 Investments totalling DKK 404 million were made in million. the City Circle Line in 2009, bringing total investment in the line to date to DKK 860 million. Depreciation on the Metro has been undertaken in ac- cordance with the corporation's accounting policies. The book value of the City Circle Line has been en- The overall result for the year is thus burdened with a tered in the balance sheet at DKK 0. This is because loss of DKK 192 million. the City Circle Line is continually written down to the expected recoverable value of construction, taking The fare payment is based on an average passenger into account the planned construction investments. revenue per passenger of DKK 10.69 in 2009, calcu- Operating result of the Metro DKK million 2009 2008 Fare payments 522 493 Metro operating income 135 122 Other operating income 13 8 Total income 669 622 Payment for operations -522 -497 Contract management, etc. -26 -22 Other expenses -30 -19 Administration costs -26 -27 Total expenses -604 -565 Result before depreciation 66 57 Depreciation -192 -186 Total result -126 -129 Net profit ratio before depreciation 10 % 9 % Investment budget of the City Circle Line DKK million Investments Investments Total budget in 2009 as of 31 Dec 2009 City Circle Line 404 860 18,087 PAGE 8 METROSELSKABET Financing At the end of 2009, Metroselskabet had an overall balance of DKK 1.8 billion. The corporation has made fixed-term deposits at banks and purchased bonds. All investments have been made in Danish kroner. The corporation achieved an overall effective interest rate on its investments of 3.7% in 2009 (4.8 % in 2008). Following on from the founding of Metroselskabet, the corporation took over an interest rate swap in 2009 for a principle sum of EUR 135 million. At the end of 2009, this swap is included under long-term debts, with a total negative unrealised market value of DKK 56 million. Arbitration claims The construction contractor from stage 1 and 2A of the Metro, COMET, has lodged a claim for additional payment of around DKK 2 billion. The claim relates to the years 1999 onward and therefore covers a pe- riod when the construction work proceeded without any major problems. The former Ørestad Develop- ment Corporation reviewed the claims and informed COMET that these would essentially be rejected on the existing basis. COMET has subsequently lodged a claim for arbitration. Metroselskabet has taken over the claims raised against the Ørestad Development Corporation. A ruling on the case is expected in 2011, according to the current timetable set by the Arbitra- tion body. A settlement was reached in early 2010 with the Movia transport company regarding distribution of passenger income for the period 2005-2007, after Movia had raised an arbitration claim against Metro- selskabet. The construction contractor from stage three of the Metro, Hoffmann/Arkil-Novejfa, has lodged a claim for additional payment in connection with the con- tractor's final settlement of around DKK 81 million. Metroselskabet has reviewed the claims and informed the contractor that they must essentially be rejected. The contractor has lodged a claim for arbitration. The ruling of the Court of Arbitration is expected in 2011. ANNUAL REPORT 2009 PAGE 9 PAGE 10 METROSELSKABET Corporation management Corporation background fore based on a balance between short term liquidity Metroselskabet was founded on 26 October 2007 un- considerations and long-term economic interests, with der the provisions of the Act regarding Metroselska- the latter being most important.