VTG wagons.

EUROPE: Synergies following the acquisition of AAE and improved efficiency across the business meant wagon leasing and rail logistics company VTG AG saw a 2·6% rise in operating profit to €345·3m in 2016, despite a 4·0% fall in revenue to €986·9m.

Announcing the company’s preliminary results on March 7, CEO Heiko Fischer said 2016 had been ‘an exciting and eventful year’. Looking forward, the company expects ‘a mild positive trend in revenue and profit in 2017’. The ongoing fleet-wide roll-out of digital telematics based on Nexiot smart sensors will be ‘a major milestone’ towards making rail more competitive.

Revenue at the wagon leasing business was down 3·7% year-on-year to €517·2m in 2016. A quarter of this decline was due to better capacity utilisation, with no effect on earnings. However, there was slack demand in some market segments, with low diesel prices and a decrease in German lorry tolls hitting the intermodal business. Capacity utilisation fell from 90·6% in 2015 to 89·8% last year.

The Rail Logistics Division saw revenue decline by 3·6% to €312·3m, with VTG citing production outages at customers, lower demand in the agricultural sector and the discontinuation of low-margin business. Despite this, EBITDA was up 71·2% to €5·8m as a result of higher margin orders and process optimisation.

Volumes at the Tank Container Logistics business remained stable, but lower rates meant revenue was down 5·3% to €157·4m and EBITDA was down 7·2% to €11·2m.

A dividend of €0·75 per share is proposed by the board. In September 2015 the board had set a goal of improving earnings per share to €2·50 by 2018, but the company says growing uncertainty about global economic development means this could be delayed by a year.