Green Cargo can now declare a profit for the third quarter due to a slight increase in volumes, the effects of ongoing efficiency enhancement programs and successful new sales efforts. The income after financial items totaled 6,4 (4) million EUR for the quarter. The accumulated income after financial items is -21,9 (11,5) million EUR.
The recession dramatically reduced Green Cargo’s transport volumes. Volumes are down 28 percent so far this year compared to last year. This has led to reduced revenue and significant losses. However, there has been a clear improvement during the third quarter.
“Green Cargo has substantial fixed resources in the form of locomotives, wagons and personnel. It was therefore necessary to quickly streamline both production and supporting activities. Our action program will reduce our costs by over SEK 600 million on a yearly basis. Significant elements of this have now been implemented and we are seeing the effects on the income statement,” says CEO Lennart Pihl.
Despite a large drop in volumes, Green Cargo has managed to maintain the fill rate of freight trains through efficient planning and new sales where there has been free capacity.
“Our sales representatives have landed over 400 new transport agreements with customers and 22 of these are entirely new customers for Green Cargo. There is a growing interest in rail-based transport solutions as a result of an increased focus on the environment and confidence in the quality provided by Green Cargo. Our punctuality rate for customer deliveries has been at 95 percent for over two years. We even achieved a punctuality rate of 96 percent last quarter,” says Lennart Pihl.
Lennart Pihl explains that even though the market looks slightly better now compared to last summer, Green Cargo still expects continued low volumes in the foreseeable future.
The quarter in brief:
- An action program is helping to reduce Green Cargo’s costs by SEK 636 million on a yearly basis over a three-year period. A level effect of SEK 328 million has already been achieved during 2009
- Green Cargo’s punctuality rate for customer deliveries reached 96 percent for the third quarter
- Green Cargo’s third party logistics services grew by almost 12 percent during the period January – September and has expanded floor space by over 20 percent
- Investments of SEK 622 (315) million were made during January – September primarily in locomotives, wagons and logistics facilities
- 407 new transport agreements were made during January – September, with the inclusion of 22 new customers
- The intermodal set-up for Coop, with daily unit trains from Helsingborg – Stockholm, came into effect on 1 September.
