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Croatian government approved HZ Cargo restructuring guidelines

The Croatian government approved the guidelines for HŽ Cargo restructuring plan for 2014 – 2018. These focus on financial consolidation, being  primarily aimed at rescuing the firm and avoiding bankruptcy. The government also consented HŽ Cargo to borrow 32.8 million euro from Croatian Postal Bank and Croatia Bank,  for the financial consolidation of the company and for the redundancy program.

HŽ Cargo d.o.o.  is the biggest cargo rail operator in Croatia with 11 million tonnes of goods transported annually. The major parts of HŽ Cargo d.o.o. services are provided on railway lines which are Croatian sections of Pan-European transport corridors (X, Vb and Vc), and in line with this, it cooperates with railways which are located on these corridors.

HŽ Cargo d.o.o. owns a 100 per cent of six companies, which activities consist in transport  of goods, maintenance of passenger and freight wagons and wagons for special purposes, workshops which specialize in construction, maintenance and repair of wagons, EMUs, overhaul and renewal and transshipment of cargo in river ports, as well as water transport, extraction of pebble stone, sand and clay.

The adopted guidelines call for 804 lay-offs in the first phase of the restructuring process and a further 950 in the second phase, for financial consolidation of the company, resolving the status of its affiliates and cutting gross pay, among other measures.

According to the document, HŽ Cargo, which employed 2,686 at the end of 2013, is expected to post earnings before interest, taxes, depreciation, and amortization (EBITDA) of 48.7 million kuna in 2014 and boost that figure to 195 million kuna in 2018. Revenues from goods transportation services are seen rising to 635 million kuna in 2018 from 500 million kuna this year.

Freight volumes at HŽ Cargo, which now operates in a deregulated environment, are projected to drop to 9.0 million tonnes this year from 10.9 million tonnes in 2013, and stay flat through 2018.

Sources* Croationa Ministry of Maritime Affairs, Transport and Infrastructure; wire.seenews.com; photo HZ Cargo

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