CER Cargo Holding Aims to Expand into the Austrian and German Markets
CER Cargo Holding's significance in the reconstruction of the Belgrade-Budapest line and the construction of the V0 line will only be fully realized if concomitant improvements are made to both domestic and foreign infrastructure capacities, Otto Horváth, CEO of CER Cargo Holding, told Világgazdaság in an interview.
The company is preparing to establish subsidiaries in Austria and Germany.
Despite challenging conditions, the CER group closed 2023 with better results than the previous year and its projections. Evolving from one of the first private railway companies in the country, the holding has been establishing its presence in European countries on the back of its strong domestic market positions, Horváth shared with Világgazdaság.
HOW HAS THE WAR IN UKRAINE, THE ECONOMIC SLOWDOWN, AND THE GROUP'S EXPANSION PLANS IMPACTED THE HOLDING'S COMMISSIONS?
A significant portion of CER Cargo Holding's business involves the transportation of agricultural, steel, and chemical products. Despite the war in Ukraine and general economic conditions leading to a reduction in volume last year, the holding operated successfully in 2023, with its operational area expanding this year.
HAVE THERE BEEN RECOVERIES OR NEW SHIPMENTS FROM UKRAINE TO CER FOLLOWING LOST CONTRACTS DUE TO THE WAR?
The war in Ukraine thwarted our planned collaborations and traffic. We remain optimistic about the operations of our Polish and Romanian subsidiaries, but significant positive change is likely only after the war concludes.
WHAT IS THE CURRENT STATE OF THE GROUP'S FLEET, AND IS THERE A NEED FOR EXPANSION?
Currently, the company fleet consists of 18 locomotives. Our medium-term business plan includes the acquisition of more locomotives and freight wagons, tailored to our transport needs.
WHICH DOMESTIC RAIL INFRASTRUCTURE DEVELOPMENTS ARE MOST URGENT FOR CER'S OPERATIONS?
For our company, the completion of the Belgrade-Budapest line reconstruction is of utmost importance, followed by the construction of the V0 line. It's crucial to note that these developments only bring benefits if the connecting domestic and foreign infrastructure capacities also improve; otherwise, existing bottlenecks will detract from the positive effects of these projects.
HOW DOES THE GROUP OPERATE ON THE SZEGED–RÖSZKE–SUBOTICA LINE?
CER Hungary Zrt. operates on this line as effectively as possible, like other companies, albeit with significant difficulties. Typically, five freight train pairs run daily on this route in the absence of track closures. Demand exceeds this number, but some transporters have shifted to road or other rail routes in the past two years due to limitations like the absence of electric traction or the availability of Serbian stations for train crossings.
Improvements in track usage restrictions and better conditions for operations are expected following the reconstruction of the 150 line.
WHAT ARE THE KEY FIGURES FOR THE GROUP IN 2023?
Last year, the revenue was 11 billion HUF, with an EBITDA of 1.5 billion HUF, and a pre-tax profit of 0.8 billion HUF. Each of these figures exceeds their respective benchmarks.
DOES CER HAVE DIRECT COLLABORATIONS WITH ROAD (OR POSSIBLY WATER) TRANSPORTERS?
We collaborate primarily with road companies for loading directed trains and with water transporters for overseas shipments. The former relationship is regular, while the latter is on a case-by-case basis.
WHAT ARE CER'S CURRENT POSITIONS IN EUROPE? LAST YEAR YOU TALKED ABOUT PLANS IN POLAND AND ROMANIA.
CER Cargo Holding currently has rail freight capabilities in Hungary, Slovakia, the Czech Republic, Croatia, and as planned, in Poland and Romania. In the coming year, we aim to establish subsidiaries in Austria and Germany and acquire the necessary transport authority licenses, thereby strengthening the group's Central European position.