BKV debt projected at HUF 72 bln in 2011

Budapest public transportation company BKV projects to have HUF 68.3 billion debt on loans and total debt of HUF 72.4 billion by the end of this year, the company said in its 2010 consolidated financial report published on budapest.hu.

The government has assume up to HUF 78 billion in debt from BKV under a recent government decree which also foresees the assumption of up to HUF 300 billion of debt from state-owned railways MÁV.

The decree instructed the national development minister to draw up a proposal for a cost-efficient restructuring of MÁV and BKV as well as changes to fares and discounts that will ensure the companies do not continue to run up new debts. The proposal must be submitted to the government by September 30.

At present, BKV requires about HUF 29 billion in municipal and state support a year to keep business afloat.

BKV closed 2010 with pre-tax profit of HUF 1.018 billion, and posted net profit of HUF 610 million in 2010 as against targeted losses of HUF 3.7 billion.

Ticket revenues were 4% less than planned and price subsidies fell 3.4%, and both the number of passengers and the number of tickets and passes sold declined.

But BKV received HUF 5 billion in funding from the city council and HUF 17.5 billion in funding from the government in 2010.

Operating revenue totaled as a result HUF 135 billion last year, with expenditures totaling HUF 130 billion. As a result, operating profit came to HUF 5.2 billion, but was lessened by losses on financial and one-off operations.

In the company's 2011 business plan, BKV projects a slight increase in ticket revenues, and expects to receive grants of a combined HUF 29 billion grant from the government and the city council in addition to the consumer price subsidies and normative support.