France's state-owned railway SNCF returned to profit in the first half of 2010, helped by a recovery in freight traffic and logistics.
Europe's second largest rail company after Germany's Deutsche Bahn booked net profit of $101 million in the six months to June 30 against a $625 million loss in the same period in 2009.
"The first half of 2010 constituted a partial recovery in activity that was lost in the first half of 2009, particularly in freight transport," SNCF chairman Guillaume Pepy said.
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But the company said the results fell far short of what it needs to fund operations and cover its investment needs.
Operating profit jumped 76 percent to $1.25 billion and revenue increased 25.1 percent to $18.8 billion, boosted by the integration of new companies, including Ermewa, a Geneva-based rail wagon and container rental firm acquired by SNCF's logistics unit Geodis.
The freight and logistics unit SNCFGeodis swung to an operating profit of $64.3 million from a $76.9 million year earlier loss, mainly due to higher forwarding earnings on increased container volume and freight rates on routes between Asia and Europe.
SNCFGeodis revenue soared 25.4 percent to $5.4 billion from $4.3 billion in the first half of 2009.
SNCF's core rail freight unit increased traffic from a year ago but still booked a $184 million loss, taking its losses since 2003 to around $4 billion.
Rail's share of France's freight market has declined to 14 percent from 21 percent in 1996 and SNCF has lost 10 percent of the domestic rail cargo shipments to private operators since the market was opened up to competition in 2006.
The French government last year unveiled a $12 billion plan to boost rail's domestic market share to 25 percent by 2022, mainly at the expense of trucking.
SNCF plans to sharply increase container traffic to and from French ports, boost its international operations and use its high speed passenger network to grow its express business.
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