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Czech Republic Freight Transport Report Q2 2010
Market |
Logistics |
Report Type |
Market Research |
Country |
Czech Republic |
Published |
3 March 2010 |
Number of Pages |
61 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
CD Cargo, a subsidiary of Czech Railways, registered earnings before interest and tax (EBIT) of CZK6mn (US$0.34mn) in Q309, signalling a recovery in trade volumes. However, the subsidiary posted losses of CZK371mn (US$21.1mn) in H109. CD Cargo recorded a 23% year-on-year (y-o-y) slump in revenues to CZK10.3bn (US$585mn) in January to September 2009, while its freight volume plunged 26.8% y-o-y to 48.7mn tonnes. The company was expecting losses of CZK350mn (US$19.9mn) in 2009. CD Cargo handles 25,000 freight wagons loaded with 250,000 tonnes of goods everyday, and operates more than 9,000km of railway line.
Since our last report, we have adjusted our short-term macroeconomic forecasts for the Czech Republic. We now estimate that the 2009 recession was a little deeper than earlier expected, with GDP falling 3.8% (vs. 3.1% earlier). This year we see a slightly stronger but still less than impressive recovery, with growth of 1.8% (up from 1.1% earlier). And in 2011 we see growth of 3.1% (down marginally from 3.2% earlier). That said, we maintain our core view that the Czech economy is relatively well-placed to emerge from the global economic downturn, as a result of its stable banking system, FDI-heavy financial account, and low national debt. We now expect annual growth to average 3.2% in 2010-2014, down on 3.7% in the preceding five years.
The effect on our freight traffic forecast for the period will be moderately negative. Road haulage projections have been trimmed because of reduced freight demand. We expect total rail freight carried to be negatively affected for a few more years, due to competition from road haulage, before a modest return to growth as the restructuring of state-owned rail company, CD Cargo, begins to take effect. We have trimmed back our airfreight forecast, in view of the global downturn in the sector. The privatisation of CSA is now back off the agenda and a period of retrenchment is expected. However, the economy will slowly shake-off the after-effects of the 2009 recession. We now forecast total freight carried across all modes, measured in mntkm, to rise by an annual average of 3.6% per annum in 2010-2014. In 2009, we estimate the value of transport and communications GDP fell by 3.7% before returning to marginal growth in 2010. By 2014 the total value of the transport and communications sector will reach US$30.6bn.The sector employed 376,000 people, or 7.8% of the labour force, in 2009. We see that figure staying broadly constant up to 2014.
Until 2009, the Czech freight transport industry had been growing steadily during the first years of the 21st century. Despite the recession in 2009, our forecasts of the Czech Republic’s freight transport industry are still positive for all sectors. This outlook is based on the effect of the country’s membership of the EU and its efforts to harmonise with the EU transport system, coupled with a stable economy. The government’s 10-year transport plan should benefit both freight and passenger transport in the long term, through the modernisation and improvement of the roads, railways and airports.
Road haulage will remain relatively dynamic with average annual growth of 4.0%. Oil shipped by pipeline should grow at around 3.7% per annum in 2010-2014, ahead of GDP. However, we believe rail freight carried fell slightly in recent years; the average growth for the forecast period will come out at a more modest 2.5% per annum. Freight carried by inland waterways will grow slowly at 1.6% per annum. We expect airfreight to grow at the most rapid pace, although it is starting from a low base. Airfreight carried will rise by 5.1% each year on average in 2009-2013.
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