ANNUAL REPORT 2015 AB Lietuvos Geležinkeliai Mindaugo G
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ANNUAL REPORT 2015 AB Lietuvos Geležinkeliai Mindaugo g. 12, Vilnius LT-03603, Lithuania Fax. +370 5 269 21 28 [email protected] www.litrail.lt ANNUAL REPORT 2015 LITHUANIAN RAILWAYS 6 Contents Overview of economic and financial activities 15 Rolling 13 stock 17 Passenger Freight transportation transportation 21 19 Infrastructure 25 Technical development Environmental and investment policy protection 29 Information 27 systems 31 Traffic safety International relations 39 35 Highlights 40 Human resources and JSC Lithuanian social initiatives Railways manage- 42 ment structure Balance 41 sheet 44 Independent Income auditor‘s report statement ANNUAL REPORT 2015 Lithuanian Railways means more than 155 years in experience 50% 10,000+ 84.9% Up to 50% of the freights in Lithuania are transported by railways Employees in 2015 In 2015, 84.9% of its total revenue the Company earned from freight 1,500+ forwarding operations 20+ Customers 105 countries of the world use the services provided by JSC Lithuanian Railways 544 Railway stations 385 544 level crossings 48.05 200+ 383 viaducts and bridges In 2015 – 48.05 m tonnes of freight 200+ locomotives LITHUANIAN RAILWAYS The Lithuanian transport policy seeks the development of nius and Kaunas public intermodal terminals, completion sustainable and environmentally-friendly transport, and the of the projects of road construction works at the sections creation of green transport corridors. The strategic objectives Kūlupėnai–Kretinga, Pavenčiai–Raudėnai and Telšiai–Dū- of JSC Lithuanian Railways related to ensuring the quality of seikiai, and the end of the five years manoeuvre locomotive passenger transportation and freight forwarding services are upgrading programme. in line with the provisions of the State policy, and are being successfully attained. Seeking to ensure that the national railway development plans are successfully implemented, in 2015 the Board of the Com- While using European Union financing, the Company in 2015 pany discussed and passed appropriate decisions concerning was intensively developing and modernising the railway infra- each major project and controlled the corporate performance structure in the international transport corridors crossing the results and the process of investment projects in progress. territory in both the North-South and East-West directions. Although throughout 2015 the external economic conditions During 2015, the Company allocated EUR 89.3 m of its invest- in the transport sector were quite challenging, especially in ment resources for the restoration and modernisation of the the international transportation sector, JSC Lithuanian Rail- railway infrastructures, and acquired assets and carried out ways managed to achieve positive results, operate at a prof- works amounting to EUR 73.5 m. it and secure the property interests of the shareholder (the State). In 2015, the Company recorded the completion of Stage I of the Rail Baltica project which included building of the Euro- The professionals working at the Company are successfully pean standard gauge, and the reconstruction of the existing coping with the challenges and fulfilling the defined strategic railway section of the Lithuanian and Polish state border– objectives. Mockava–Šeštokai–Marijampolė–Kazlų Rūda–Kaunas. The Company also entered into agreements on financing further SAULIUS GIRDAUSKAS works under the Rail Baltic project in 2014–2020. Vice-Minister of Transport and Communications of the Republic of Lithuania The other equally important undertakings were the commis- Chairman of the Board of JSC Lithuanian Railways sioning of the Vilnius railway bypass, launching of the Vil- ANNUAL REPORT 2015 In 2015, due to political and economic reasons, the overall It is highly encouraging that in 2015 the activities and the railway transportation volumes decreased significantly in the performance of JSC Lithuanian Railways were appreciated. neighbouring States; therefore, the conditions in the railway Within the national transportation sector Lithuanian Rail- transport market were challenging. This situation did have an ways was recognised to be the most desirable employer; fur- effect on the performance of JSC Lithuanian Railways. In 2015, ther, the Company was awarded the nomination “For merits the Company transported 48 m tonnes of freight, of which to business. Innovative solution leader 2015”, the award “For 33.6 m tonnes were transported on international routes, and the achievements in logistics in 2015”, and the regular contain- 14.4 m tonnes on local routes. er train VIT EKSPRES project. The Company transported 4.2 m passengers in 2015. The ren- STASYS DAILYDKA ovation of the park of rolling stock for passengers, and the Director General of means for the improvement of customer services turned out JSC Lithuanian Railways to be an advantage. During the reporting period the Company invested EUR 233.6 m, recording the execution of the investment funds us- age plan to 107 %. The Company absorbed EUR 93.9 m from EU assistance sources, EUR 1.9 m from the State budget, EUR 83.1 m from the Company‘s own funds and EUR 54.7 m were borrowed from banks. Throughout 2015, JSC Lithuanian Railways was actively searching for new opportunities in the freight transportation business, and prioritised Rail Baltica and a number of other projects in modernisation of the railway infrastructure, up- grading the rolling stock, intermodal transportation and the development of information technologies. LITHUANIAN RAILWAYS Overview of economic and financial activities KEY INDICATORS 2015 2014 ASSETS AND LIABILITIES (EUR m) Assets 2,065.1 2,017.3 Equity 1,098.6 1,012.1 Grants and subsidies 576.4 573.8 Amounts payable and liabilities 390.1 431.4 REVENUES (EUR m) 437.2 472.8 Revenue from the principal activities (sales) 429.0 461.7 Income from financing and investing activities 0.6 0.9 Other operating income 7.6 10.2 COSTS (EUR m) 433.0 447.6 Costs of principal activities 427.5 438.2 Costs of financing and investing activities 4.7 8.3 Costs of operating activities 0.8 1.1 RESULTS (EUR m) EBITDA (earnings before interest, taxes, depreciation and amortisation) 119.3 136.2 EBIT (earnings before interest and taxes) 10.3 31.6 Profit before taxes 4.2 25.2 Net profit 2.8 20.4 ANNUAL REPORT 2015 Overview of economic 7 and financial activities 2015 2014 FINANCIAL RATIOS Liquidity (current assets/short-term liabilities) 1.1 0.9 Gross margin (gross profit/sales), % 15.4 16.6 Net profit margin (net profit/sales), % 0.7 4.4 TReturn on assets (ROA) (net profit/assets), % 0.1 1.0 Return on equity (ROE) (net profit/equity), % 0.3 2.0 INVESTMENT FUNDS (EUR m) Investment funds 233.6 331.7 Corporate investment funds 83.1 86.7 PERFORMANCE INDICATORS Payroll employees 10,150 10,480 Average monthly wages (EUR) 1,026 979 Sales revenues per employee (EUR’000/person) 42.3 44.1 LITHUANIAN RAILWAYS CHANGES IN THE BALANCE SHEET trade payables, as well as payments to the subsidiaries and associates. For reasons stated above, the amounts payable Throughout the period of 2015, the value of the assets of JSC within one year and short-term liabilities of the Company Lithuanian Railways, as compared to 2014, increased by 2.4% dropped by 35.0%. to reach EUR 2,065,100. The value of the non-current assets, accounting for 95.3% in the overall structure of the assets, At the end of 2015, the debts of JSC Lithuanian Railways to increased by 4.1% and was reported at EUR 1,968,400. The credit institutions reached EUR 312.9 m; i.e. by 2.7% more value of the corporate assets increased mostly due to the than in 2015. To fund the investment projects for the mod- large-scale public railway infrastructure and the rolling stock ernisation and development of its infrastructure and the ac- upgrading investment projects, as well as the increase in the quisition of railway rolling stock, the Company has obtained value of the tangible assets. 16 long-term loans from the European Bank for Reconstruc- tion and Development, the European Investment Bank, the Compared to 2014, the value of the current assets of the Nordic Investment Bank, and other credit institutions. Company decreased by 23.4% to EUR 96.7 m, and account- ed for 4.7% of the entire assets of JSC Lithuanian Railways. The Company paid to the state EUR 8.2 m in dividends for The changes in the value of the assets resulted mostly due to the shares owned by the State in 2015. a decrease in the Company budget, as well as its inventories and amounts receivable within one year. REVENUES During the accounting year the Company’s equity appreciat- During the reporting year, the Company earned EUR 437.2 m, ed by 8.6% to EUR 1,098.6 m, essentially because of the in- i.e. 7.5% down from 2014. crease in the Company’s authorised capital by EUR 116.8 m, or 12.4% to EUR 1,057.4 m by respective resolutions of the FREIGHT TRANSPORTATION REVENUES. The Com- Government of the Republic of Lithuania. In 2015, the value pany earned a major part of its total revenues, 84.9%, from of the Company’s grants and subsidies was EUR 576.4 m, and freight forwarding operations. Freight transportation rev- its change was minor. A major share of the grants and sub- enues, which accounted for EUR 371.3 m in 2015, dropped sidies is earmarked for funding investment projects on the by 4.3% from 2014. The freight revenues decreased mostly modernisation of the public railway infrastructure financed because of the significant decline in the volumes of transit by the European Union, and used to increase the authorised freight transportation to the Kaliningrad region, which rep- capital of the Company. resents a vital importance for the revenue and performance indicators of the Company.