MÁV Cargo aims to keep top spot after market deregulation
Thursday, September 28, 2006, 18:00
MÁV Cargo Zrt, the freight unit of state-owned railway company MÁV Zrt, aims to maintain its leading position on Hungary’s rail freight market even after it is deregulated from the start of 2007, CEO Tamás Kozák said on Thursday.
MÁV Cargo currently controls about 85% of the market. This year, MÁV Cargo started a seven-year, Ft 16 billion-Ft 18 billion project to renovate its rolling stock. The company's 13,000 rail vehicles are 13 years old on average.
MÁV Cargo registered 8.6 billion ton-kilometers in 2005, 2% more than in 2004, Kozák noted. Based on first-half figures, the company will maintain this pace of growth in 2006 as well.
The company targets revenue of Ft 90 billion in 2006, up from Ft 86.3 billion in 2005. In answer to a question, Kozák said MÁV Cargo has an EBIDTA rate of 2%-3%. He added that the company has reduced its cost-to-revenue ratio by an annual 4%-5% this year.
Kozák noted that track fees account for about one-third of MÁV Cargo's costs. He added that the company has taken legal measures against a decision by the Hungarian Railway Office on discounted track fees. MÁV Cargo would like to see a predictable rail fee policy in Hungary, which would boost the competitiveness of the country and the whole region, Kozák said.
Asked how MÁV Cargo's strategy fits with a government decision in July to privatize the company, Kozák said the company had worked out a strategy that would be acceptable to any new owner.