Israel Railways ended 2014 with a NIS 1.5 billion net profit. Excluding one-time revenue, profit was NIS 147 million, a significant increase in comparison with 2013, when the company's net profit was NIS 27 million.
The profit is attributable to a drastic rise in the company's revenue, which almost doubled from NIS 1.6 billion in 2013 to over NIS 3 billion in 2014.
The increase in revenue is attributable to growth in the number of passengers and the volume of cargo. The company carried 48.5 million passengers in 2014, up 7.5%, compared with 45.1 million in 2013. Cargoes transported were up from 6.7 million tons in 2013 to 7.5 million tons in 2014, a 12% rise. The company earned NIS 169 million from cargo transportation in 2014.
Cash flow from current activities totaled NIS 175 million in 2014, compared with NIS 27 million in 2013 and negative NIS 163 million in 2012.
The relatively high profit in 2014 can be attributed to the new operating agreement signed last June by the company with the Ministries of Finance and Transport and Road Safety arranging the company's development element and its current operating fees. The agreement included the writing off of a NIS 500 million loan and an additional recoverable NIS 500 million, and set retroactive subsidy reimbursements from previous years amounting to NIS 400 million.
Although Israel Railways already had a subsidy before last June, only last year did the company make a profit. Actually, the losses it made up until last year began in 2003, when Israel Railways became an independent government-owned company.
The Israel Railways CEO said, "The array of activities carried out in recent years, including improvement of service to our customers, a business concept, savings in expenses, streamlining of work processes, and the new operating agreement with the government, have made Israel Railways profitable for the first time. This profit also helped the company's billion shekel bond issue, which was oversubscribed, with NIS 4 billion in demand."
Published by Globes [online], Israel business news - www.globes-online.com - on March 26, 2015
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