BRATISLAVA, June 2, (WEBNOVINY) — Railway freight transport company Cargo Slovakia produced a EUR 8.76 million loss in the first quarter of 2011, reducing it by 62.5 percent compared with a year ago. In the same period of last year, the company produced a loss of EUR 23.34 million. The highly indebted state-controlled company reported an operating profit EUR 11.56 million in the first 2011 quarter, which was the first time in three years. One year ago, the company recorded an operating loss of EUR 4.35 million. According to data on the development of the company’s finances presented by Transport Minister Jan Figel and Cargo management’s Martin Stochmal at a press conference this Thursday, Cargo curbed costs by EUR 36 million. In this year’s first three months the company increased its revenues from freight transport by 1.4 percent to EUR 74.3 million and the volume of transported goods rose by 4.3 percent to 9.46 million tons. This year Cargo plans to curb its overall loss to EUR 29.4 million. Its 2010 loss reached EUR 122.6 million.
Figel said that the situation in Cargo has been stabilized thanks to recovery measures, yet the consolidation of the company has to continue, as Cargo had a debt of EUR 600 million one year ago, equaling 82 percent of the value of its property. The minister also said that most lucrative orders were handled by other companies. “The employees worked for four days and were paid for five. Funds just flew through the company to different subsidiaries,” emphasized Figel, criticizing his predecessor Lubomir Vazny for allowing former management members to receive altogether EUR 850,000 in severance payments, while Cargo was facing possible bankruptcy.
Before the economic crisis, Cargo used to transport some 50 million tons of goods per year. In 2010, this amount dropped to 38.6 million tons and is expected to grow this year to 41.26 million tons. One of the most important changes was reducing the cost for use of railway infrastructure for freight rail traffic from January 2011. As part of its revitalization, Cargo plans to lay off some 2,000 of the 9,546 employees it had in late 2010.
The Transport Ministry plans to sell at least 66 percent of Cargo before June 2012. On Wednesday, Figel’s predecessor Vazny accused Cargo Slovakia of worsening the company’s results with the aim of securing its cheap sale to a strategic investor. Vazny claims that if the freight transport company lays off the planned 2,000 employees this year, it will not secure the expected increase in performance and basic functions in the future. However, Figel disagrees, stating that even with the layoffs, the company would be able to handle increasing amounts of freight traffic. He said that Polish Cargo is laying off 40 percent of its employees.
SITA