VTG seeks Russian partner

VTG AG, the company which runs the largest fleet of privately owned railway cars in Europe, is currently seeking for a Russian partner to expand its tank-container transport business in that country and neighboring regions, Bloomberg reports.
Discussions are in an “advanced stage,” Chief Executive Officer Heiko Fischer said in an interview in Frankfurt. He declined to name the Russian company. Performance at the tank containers unit, which accounted for 22 percent of group revenues last year, is lagging that of other divisions, he said.
- The drop in sales will be considerably higher than in the other units,- Fischer said. Group sales, which rose 12 percent to EUR 608.7m last year, will fall as much as 5 percent in 2009, Hamburg-based VTG said April 22.
Tank-container transport is the smallest of three VTG units and depends almost entirely on the chemical industry. European chemical production dropped 22 percent in January, and the decline accelerated in March, the European chemical association Cefic said in a report last week.
VTG controls 49,600 railway cars, mostly tankers, and also rents to automobile makers, refineries and state-owned railways. Founded in 1951 as a government-owned venture to operate specialized railway cars, VTG was privatized and then spun off by TUI AG in a 2007 initial public offering.
Analysts predict earnings before interest, taxes, depreciation and amortization to drop 8 percent this year from EUR 156.4m in 2008, according to the average of nine estimates compiled by Bloomberg. That’s more than the 5 percent drop VTG forecasts. VTG is sticking to its target, Fischer said.
While revenue may fall this year and in 2010, VTG is capable of reaching the EUR 700m mark in the next five years, Fischer said.
- We are more confident about our Ebitda forecast than for sales,- he said.
First-quarter business from the chemical industry has fallen as automobile demand remained near reduced levels VTG saw in the final three months of 2008, Fischer said. About 1,000 railways cars were taken out of service because of declining auto-industry demand, he said. Capacity usage last year was near 94 percent before a slump in the final quarter lowered it to 91.1% for the year, he added.

Source: Transportweekly