During the first quarter of this year, Green Cargo’s turnover fell by four percent compared to the same quarter last year. The revenue landed at just over one billion. The operating result turned from a profit of SEK 41 million to a loss of SEK 98 million.
Subdued demand, strikes in Germany and extreme winter weather are mentioned as explanations.
CEO Henrik Dahlin, who took office in September last year, is not satisfied.
– We need to make profit-enhancing measures and improve the service to our customers, he says.
To reduce the cost of the suit Green cargo recently announced a savings program where 70 employees in the administrative operations have been notified of layoffs. The group has a total of approximately 1,800 employees.
Photo: Peter Lyden
– We have fantastic staff and it is certainly not their fault that we are where we are. But it is worrying that we had difficulty reaching profitability.
Cash flow from operating activities was negative, minus 153 million, during the last quarter. In one year, the group’s cash and cash equivalents, including investments, have more than halved from SEK 521 to SEK 243 million. Liquid assets excluding investments were only SEK 7 million at the end of March.
– Our liquidity is good, says Henrik Dahlin and points out that the company’s total liquidity is just over one billion, including unused credit facilities of approximately SEK 800 million.
Have you had to use these?
– I don’t think so right now, but it is very close at hand that it will be needed to some extent before the end of the year.
Do you need to draw up a control balance sheet this year?
– We are putting together a plan to ensure that this situation is avoided, of course.
How do you view the risk of bankruptcy?
– I don’t want to put those words in my mouth. We are taking steps now to ensure that we become competitive on several fronts.
The net debt ratio has gone from 1.3 to 2.8 in one year. Significantly higher than the requirement from the owner that the highest should be 0.9.
“We are aware of the company’s financial situation. Profit development in the company has been weak for a long time. We follow the development carefully,” writes Lars Hjälmered (M), State Secretary at the Ministry of Finance with responsibility for the state-owned companies, in a text message.
In autumn 2020, the Riksdag clubbed that Green cargo would receive a shareholder contribution of SEK 1.4 billion to strengthen the company’s coffers. But it was stopped by the European Commission, which believed that it would distort competition in the market.
A new capital injection is therefore out of the question.
– The rules are completely understandable. Having said that, it is important for us to build a credible long-term plan. It should ideally be so good that it can attract private capital, says Henrik Dahlin.
However, the company is still supported by the state environmental compensation for freight trains, which was rolled out by the previous government, and which applies until 2025. What happens after that is unclear.
“Freight operators need long-term conditions to make the investments required to increase the attractiveness of freight transport by rail. We are investigating the conditions for increasing that attractiveness”, writes Lars Hjälmered and states:
“Green cargo has an important role to play for climate change as well as for Swedish business and its competitiveness”.
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