State-owned railway company DSB has released a financial statement revealing that, despite increases in both income and passengers, they continue to lose money in 2012.
The company says it has lost 355 million kroner so far this year. This comes on the heels of numbers at the end of last year showing losses of just over 500 million kroner for the first nine months of 2011.
DSB is also budgeting for a 300 million kroner shortfall in its Swedish operations, bringing the potential for losses to over the one billion kroner mark.
The company’s acting CEO said the deficit is due to increased costs and issues with its operations in Sweden.
“DSB has seen an increasing number of customers and positive developments on the revenue side,” said Jacob Kjær, CFO and acting CEO of DSB. “On the other hand, we have experienced higher costs and came out of 2011 with a sizeable deficit."
DSB’s management has previously produced a plan to cut spending by approximately one billion kroner per year by 2015. The plan includes cutting approximately 1,000 jobs over the next three years. The company says most of the cuts will come via attrition, voluntary severance or reassignment.
“We are turning the tide,” said Kjær. “We are focusing on earnings and especially on cutting costs. All options are on the table.”
Kjær said that cost-saving measures include streamlining DSB’s procurement processes and outsourcing IT and cleaning services. The company’s Copenhagen headquarters is also up for sale.
DSB’s Swedish operations in conjunction with its Swedish subsidiary DSB Väst loses about 100 million kroner each year, a situation that Kjær says is simply unsustainable. The DSB board is negotiating with DSB Väst and the the traffic authority Västtrafik in Gothenburg on a solution that would transfer DSB operations to another operator and allow the company to be released from its current contract with DSB Väst which is scheduled to run until 2018.
"Passenger growth and punctuality are the foundations of our vital role in the community,” said Kjær. “We must focus on our core businesses.”
