REPORT



RENFE OBTAINS A BALANCE RESULT OF 8.042 MILLIONS AND SURPASSES THE AIMS OF THE CONTRACT-PROGRAM

VICTORIA MARIÑO FERNANDEZ


Renfe has achieved a positive management balance result of 8.042 million pesetas in 1999. This number improves by the same amount the goal fixed in the Contract-Program, signed by the State, which included to square to cero the balance, with the state contributions, the result of the management balance.



The result obtained by Renfe in 1999 is due to a substantial increase in the commercial incomes and a reduction of the expenditures with regards to the forecasts Contract-Program. Thereby, with regards to1998,and in homogeneous fiscal conditions, the result improves in 5.934 million pesetas, due to the increase in incomes and the cut down in the mentioned expenditures.
On the other hand, the commercial incomes increased in1999 in 8.325 million pesetas with regards to the closing of the former fiscal year. Thus, the own incomes were at the end of the year, 230.760 million pesetas, over the 222.435 million obtained in 1998.
Furthermore, the High Speed Unit can be pointed out, which has undergone an increase of 13.4% in its incomes which implies an increase in its sales of 3.132 million, till these had reached at the end of 1999 26.585 million pesetas.
Furthermore the trains of the Great Lines have considerably increased in their sales, which means a record in Renfe with almost 53.000 million pesetas in 1999, 9,4% more than (4.551 million) than the year before. The Suburban lines has also undergone, a considerable increase and has reached 41.165 million pesetas in incomes, 7% more than in the past year. The Combined Transport trains have increased in 3.7% in 1999 which places its sales in 19.082 million, and that of the Regional ones with an increase of 2,7% with a turnover at the end of the year of 17.101 million pesetas. Nevertheless, the Cargo unit has undergone a fall of 4,9% in its incomes, 34.115 million 1999, 1.744 million pesetas less than in1998.



Miguel Corsini, president of Renfe.



When it comes to talking about the state contributions, they represent in 1999 232.109 million pesetas, 5.907 million pesetas less than in the former fiscal year. These contributions are destined to cover, amongst others, the public service contracts of the Suburban lines (vital for life in the great cities) and the Regional lines (essential to vertebrate the territory). The State will also cover the management and maintenance of the railway framework, which is publicly-owned, and that Renfe maintains through the Contract-Program with the State. Another of the items to which the State destines the contributions is to cover the interests that the management of the historical debt gives rise to.Another of the agreements included in the Contract-Program is the Viability Plan. In this framework it is necessary to point out that the High Speed, capital resources, Informatic systems, and Commercial Telecommunications units show benefits, whose results contribute to reduce the needs of the financing of the Viability Plan, in which are also included the following units: the Great Lines, Cargo, Combined Transport, Integral Maintenance of the Trains Commercial Stations and Traction.



ACCOUNT OF RESULTS






1999
1998
ABS
%
Commercial incomes230.760222.4358.3253,7
State contributions232.109238.016-5.907-2,5
TOTAL INCOMES 462.869460.4512.4180,5
EXPENDITURES, before of VAT445.635453.2457.610-1,7
Effect VAT9.191
TOTAL Expenditures454.826453.2451.5810,3
RESULTS OF MANAGEMENT8.0427.20683611,6

With regards to the own expenditures, they were reduced in1999 in 7.610 million pesetas compared with the former year, in homogeneous fiscal conditions. By entries, what can be pointed out is that the Personnel expenditures increase in1.8% and a substantial reduction in the interests (that are cut down in almost 14.000 million and the energy traction in1.000 million less). Renfe takes advantage in these two entries, on the one hand, of reduction of the interest rates in1999 (reduction that has managed to combine with the containment of the debt),and on the other hand, the new legislation that has been put into force that liberalises the electric energy market and has brought about, in spite of the increase in the activity, in a cut down in Renfe's bill, the company that most spent in electric energy in Spain.It is necessary to point out the appearance of a new expenditure entry, the so-called "VAT Effect", that a makes a fiscal homogenisation of the years 1998 and 1999 necessary to be able to compare them. This entry, which has meant for Renfe an additional expenditure of almost 9.200 million pesetas, a consequence of the application of the modification of the law, which has come into force for the first time in1999, and means that Renfe can not to deduct, as it did up till now, all the VAT that it supports, but only just part of it (approximately 55%). The part that can not be deducted means, logically, a bigger expenditure, which is the 9.191 million mentioned before.In one word, Renfe presents, at the end of 1999, the total incomes result of the sum of the commercial incomes and the state contributions- of 462.869 million pesetas. The total expenditures included in the Effect VAT mentioned before are of 454.826 million pesetas. In short, the result of 1999 is of 8.042 million pesetas, a positive fact that, also, means the accomplishment, and even the improvement of the agreements subscribed with the State in the Contract-Program.


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