Dutch Railways (NS) suffered an underlying operating loss of EUR 109 million in the first half of 2024. The costs incurred by NS to operate the train service remain higher than the revenues from the sale of train tickets and season tickets. This is evident from the NS half-yearly financial report 2024.
In the first half of the year, the number of passenger kilometers increased by 6.4% compared to the same period in 2023. Nevertheless, NS has been suffering from structurally fewer passengers since corona, partly due to the lasting impact of working from home.
The number of passenger kilometers compared to 2019, the last year before corona, is 94%.
In addition, costs have risen sharply due to high inflation. NS has not been able to fully pass on this inflation in the train ticket; as a result, the so-called indexation gap has increased to approximately 11% since 2021.
Even in the last year of the main rail network concession, the financial situation of NS remains challenging. In the new main rail network concession that NS will operate from 2025, it was agreed to maintain the high-quality Dutch train service. After all, nobody wants us to run fewer trains. These new agreements are expensive, which is why the government and the House of Representatives have decided to divide the bill between the government, NS and the passenger. At the same time, the circumstances under which NS will operate will remain complex in the coming years. However, with the new main rail network concession, train passengers are assured of a sustainable train journey and the Netherlands will retain a strong and coherent network.
– Angelique Magielse, Director of Finance at NS
NS detailed financial performance
Passenger transport revenues in the first half of 2024 amounted to EUR 1,619 million (2023: EUR 1,454 million). Station operating revenues amounted to EUR 227 million (2023: EUR 241 million). Passenger growth is lagging, meaning that passenger numbers are still lower than in the pre-corona period. Financial compensation for the consequences of corona has been stopped in 2024 (first half of 2023: EUR 37 million).
At the request of the House of Representatives, the government has released a one-off amount of EUR 120 million for the year 2024, allowing NS to postpone a proposed 8.7% increase in train ticket and season ticket rates.
This amount is no longer available for 2025, forcing NS to implement the postponed rate increase in 2025, on top of regular inflation.
Running trains on the Dutch main rail network – the most important core task of NS – is still loss-making. NS realised an underlying operating loss of EUR 109 million in the first half of 2024 (2023: EUR-87 million).
The increased revenues are insufficient to compensate for the increased costs. The costs are increasing due to the expansion of services, the filling of a large number of vacancies in 2023, the increase in infrastructure levies and energy costs and the conclusion of the new collective labour agreement.
The net result for the reporting period amounts to EUR -33 million (2023: EUR 38 million). In the first half of 2023, the net result was affected by incidental income in the financing result (EUR 55 million) and in the income tax (EUR 13 million). A
fter correction for this, the net result for the first half of 2023 is comparable to the reported net result for the first half of 2024.
The explanation of the operational performance will follow at the end of August in the half-yearly report to the concession granter, the Ministry of Infrastructure and Water Management.
NS cutting 500 head office jobs
NS continues to make efforts to reduce the cost level and bring it into balance with the downwardly adjusted passenger forecast, in order to improve financial performance and keep train tickets as affordable as possible.
In addition to a savings program started in 2020, NS is taking an additional package of savings measures in view of current developments. In total, NS expects to save approximately EUR 200 million in costs annually.
The savings program includes the following elements: fewer people at the head office (a targeted reduction of 500 FTE through natural attrition), the disposal of office space and the reduction of the number of IT systems.
NS is also investigating whether future train refurbishments can be simplified.
Although it cannot be completely prevented, NS does everything it can to ensure that the savings have as little impact as possible on passengers and operations.
Concession agreements 2025
As client, the Ministry of Infrastructure and Water Management has decided to no longer charge a concession fee – currently EUR 86 million per year – but to provide an annual contribution of EUR 13 million from 2025.
As shareholder, the Ministry of Finance has agreed to a lower return. NS is taking additional savings measures to reduce costs and part of the inflation will be passed on to the traveller via the price of the train ticket.
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