VTG Aktiengesellschaft continued to steadily develop its business in the firsthalf of 2014 despite global economic and political challenges. The many new build wagons in the core Railcar Division, particularly contributed to this trend. Overall, Group revenue was on a par with the previous year and reached EUR 404.7 million (previous year: EUR 404.4 million). The EBITDA increased by 0.6 percent to EUR 90.2 million (previous year: EUR 89.6 million).
“Consistently good capacity utilization levels and numerous new build wagons have enabled the Railcar Division to make a disproportionately high contribution to Group results. This provides fresh evidence of the effectiveness of our stable business model,” says Dr. Heiko Fischer, CEO of VTG Aktiengesellschaft. He adds, “We have managed to sustain positive business development, despite the impact of the troubled situation in the Ukraine on the Rail Logistics Division.”
Wagon fleet investments are paying off
Revenues in the Railcar Division rose by 2.5 percent to EUR 173.2 million (previous year: EUR 169.0 million), and the EBITDA by 2.9 percent from EUR 88.3 million to EUR 90.8 million. At 52.4 percent, the EBITDA margin related to revenue was also slightly above the 52.3 percent value from the previous year.
Around 800 new build wagons and investments of more than EUR 100 million enabled further expansion to the wagon fleet in the first half of the year. 600 of these wagons are being used in Europe, primarily by customers from the steel and agricultural industries. An additional 200 new wagons were hired out in Russia, which is a strategically important market in the long term. Fleet utilization capacity could also be increased to 90.2 percent in comparison to both the start of the year (Q1/2014: 90.1 percent) and the previous year (Q2/2013: 89.7 percent).
Innovations in wagon construction
In May 2014, VTG began to implement an innovation project. The company has developed and is constructing two wagon prototypes which enable LNG to be transported for the first time in Europe by rail. The construction of the tanks is well underway at Chart Ferox, which specializes in constructing tanks for the transport of cryogenic products. The VTG subsidiary Waggonbau Graaff is subsequently responsible for preparing the assembly and approval for the two prototypes. Rail transportation is therefore being developed to have a dual benefit in relation to environmental sustainability. Natural gas is in itself an ecological energy source and rail is the corresponding environmentally friendly means of transport.
Logistics units remain under pressure
After a difficult start to the year, the logistics units have only managed to recover to a certain extent. The Rail Logistics Division recorded a 0.6 percent increase in revenues to EUR 157.2 million (previous year: EUR 156.3 million). The EBITDA dropped back to EUR 0.1 million (previous year: EUR 2.7 million) and the EBITDA margin related to gross profit stood at 0.7 percent (previous year: 23.7 percent). In addition to the continuing tensions between Russia and the Ukraine, stronger competition in the liquid goods segment and the mild European winter prompted a considerable decrease in the consumption and transport of heating and other fuels which has had an impact on results.
Revenue in the Tank Container Logistics Division stagnated as a result of pricing pressures and global overcapacities. It amounted to EUR 74.2 million and was therefore 6.0 percent below the previous year’s value (EUR 79.0 million). Nevertheless, revenues remained stable in comparison to the first quarter of 2014. By contrast, the EBITDA was exactly in line with the previous year, at EUR 5.5 million. At 44.9 percent, the EBITDA margin related to gross profit rose slightly above the previous year (43.8 percent).