April 24, 2018

BLS earnings decline as investment ramps up

Written by  Anitra Green
  • Print
  • Email
BLS earnings decline as investment ramps up David Gubler

SWITZERLAND’s second-largest railway BLS published its annual results on April 19, revealing that the company’s rail, bus, and lake shipping services had breached the 1 billion passenger-km barrier for the first time.

BLS CEO Mr Bernard Guillelmon says this figure will increase even further over the next decade with passenger numbers expected to increase by around 10 million a year by 2030.

Ridership growth was driven in part by the introduction of two-hourly Brig - Domodossola services in July 2017. This means there has been a three-fold increase in regional services over the Simplon route since BLS took over responsibility for the route in December 2016.

BLS recorded a 3.9% drop in net earnings in 2017 to SFr 15m ($US 15m), despite revenues increasing 0.8% to SFr 1bn. Operating expenses were up by 1% to SFr 771.5m while operating profit before interest and taxes (Ebit) fell 4.7% to SFr 26.5m.

BLS says it expects the financial situation to remain tight in the next few years in view of the high investments being made in the modernisation of its depots and the acquisition of new rolling stock from Stadler.

A key strategic focus for BLS in 2017 was the development of its license application for a concession to operate five long-distance routes. On the same day BLS released its annual results the Federal Office of Transport (BAV) announced it intends to award the concession for the Bern - Biel and Bern - Burgdorf - Olten routes to BLS, with Swiss Federal Railways retaining all other long-distance services.

The company’s international rail freight arm BLS Cargo generated a profit of SFr 3.5m, a result consistent with the previous year, despite incurring SFr 2m loss as a result of the closure of Germany’s Rhine Valley line following the Rastatt tunnel collapse in August 2017.

For the first time, the Lötschberg axis overtook the Gotthard route to become BLS Cargo’s main transalpine corridor, accounting for 54% of transit volumes. This is attributed to the six-month closure of the Luino line into Italy for gauge enhancement works.

The Lötschberg Base Tunnel is now reaching the limits of its capacity, and Guillelmon says the need to complete the second track in the tunnel is becoming increasingly urgent.

Get the latest rail news

IRJ Rail Brief newsletter covers global railway news