NETWORK Rail’s pre-tax profits dropped by more than 75 per cent last year, amid a reduced budget and rising debt pile.
The owner of the British rail system lost eight per cent of revenue, down to £5.67bn, in the last financial year due to a reduced government grant and a fall in track charges paid by train operators.
Pre-tax profits fell to £395m from £1.52bn last year, while post-tax profits stood at £284m, down from £609m, according to results published yesterday. All earnings are reinvested in the railway.
Net costs rose slightly to £3.69bn due to lower than inflation pay rises, but the company has found £86m savings in maintenance costs.
The firm is obliged to find £1.1bn in savings by April 2014 under its five-year spending plan, a feat described as “challenging … tougher than we assumed” by the Office of Rail Regulation earlier this week.
The company’s debts rose by seven per cent to £23.84bn to help fund its investment programme, including the Thameslink, Crossrail and East London rail projects. The firm said its debt to asset ratio fell last year, to 64 per cent.
Executive bonuses will be announced at the end of the month.