‘Many contracts won or renewed’

RLE’s revenue was down 1,6% to 1,8 billion euros, the decline being mainly attributable to the commercial discontinuity of Fret SNCF (now Hexafret) imposed by European Commission competition requirements. Nevertheless, the EBITDA margin rose to 14.4% versus 11.4% a year earlier. Reviewing the 2025 financial year, the SNCF Group said that RLE had delivered satisfactory results despite difficulties in Europe’s rail freight sector. An unfavourable economic environment and supply-side constraints placed significant pressure on many market participants.

Commercial momentum remained strong, with many contracts won or renewed, including the renewal of steelmaker ArcelorMittal’a freight business in France. Intermodal activities – Forwardis, Naviland Cargo and VIIA’s rolling highway operations – continued to grow as new volumes were gained. New subsidiaries Hexafret and Technis, borne out of the discontinuity of Fret SNCF and, both established at the beginning of 2025, improved service quality in a stabilised social and operational environment and increased their profitability, the SNCF Group noted.

As for Geodis, which has significant rail freight interests, with approximately 120 trains in circulation every week operating across France and Europe, 2025 revenue came to 10,6 billion euros down 3.9% from 2024 on a scope, current and methodology basis. However, it managed to preserve its profitability, holding its EBITDA -to-revenue ratio at the same level as in 2024 (10.7%).

Ukrainian Railways orchestrated the convoy’s continuation to Kyiv. “The operation required exceptional logistical mobilisation,” according to RLE, who noted that teams worked in shifts to quickly classify and allocate routes, obtaining special transport permits in just a few days while ensuring the security of the transport from France to the Ukrainian border.

This produced an improvement in margin from 9.9% in H1 2025 to 12.0%, “the result of restructuring efforts and sector-specific public subsidies for decarbonising freight transport,“ SNCF said.

‘Robust’ operating model

The performance reflected “the robustness of its model, which is based on a rigorous commercial strategy, good geographical and service diversification, and control of its logistics flows, “ it added.

H1 2025 was marked by the launch on 1 January of two new businesses borne out of the discontinuity of Fret SNCF: Hexafret (rail freight) and Technis (locomotive maintenance) which “began operating successfully, despite a sharp drop in demand and the transfer of train services and dedicated resources to third-party operators“ – following the structural separation procedure imposed by the European Commission.

There were also major contract wins for RLE with French oil & gas giant TotalEnergies and Tricon Energy, in the Netherlands.

Buoyant activity from subsidiaries

As for the performance of RLE’s subsidiaries, rolling highway operator VIIA increased its activity by more than 14%, driven by strong volumes on its main Bettembourg-Le Boulou Lorry Rail service, which stretches from Luxembourg to the French-Spanish border.

Forwarding arm Forwardis posted a buoyant first half-year reflecting momentum in the liquid petroleum and agro-food products segments, while Combicargo also posted volume growth despite an unfavourable market environment for maritime container transport.

The first half of the year also saw RLE begin a scheduled high-speed rail service dedicated to Amazon, which travels 470 kilometres in just two hours between Paris and Lyon and is expected to transport half a million packages annually.

The reopening of the France-Italy rail line at the end of March, following its closure in August 2023 due to a major landslide in the Maurienne Valley, was also a positive development. However, on the downside, the Alpine Rail Motorway (AFA) has not yet re-entered service.

Global results and outlook

SNCF’s group’s H1 revenue totalled 21.5 billion euros (+0.6%), driven by growth in passenger rail transport. Profitability improved significantly with an EBITDA of 3.6 billion euros, up 500 million euros compared to the first half of 2024. All of the group’s activities improved or maintained their profitability “despite a challenging economic environment.“

Commenting on the outlook for the group as a whole, during the second half of 2025, SNCF said it would “continue efforts to cope with a tense economic situation and pay particular attention to macroeconomic developments.“

The terms and conditions laid down in the European Commission’s agreement with the French authorities on the discontinuity of Fret SNCF – it was suspected of receiving illegal aid from the country’s state railways running into several billions of euros – is that up to 49 per cent of RLE’s capital be opened up to outside investors.

Looking for a minority shareholder is not easy

“The Commission has not been explicit on the timeframe for the execution of this operation and we see it as a second phase development. The important thing will be to establish co-control of RLE in partnership with a minority shareholder. We’ll be able to say more about this issue in the second half of the year. For now, we’re still in the process of launching two new companies.”

The view from some market commentators is that potential investors in RLE may be put off by Hexafret’s poor profitability prospects, given the high operating costs and low margins in the single wagon load segment, the new company’s core business. However, the spokesperson played down such reasoning as it was the capital of RLE as a whole that would be opened up and not Hexafret’s solely.

“As far as Hexafret’s profitability is concerned, we are positive about its business plan and outlook, with a return to the level of Fret SNCF sales in 2025, thanks to work on our service offering and sales function, on structural costs, through identifying new growth markets and making strides in production to optimise our transit times”, the spokesperson concluded.

In addition, energy prices skyrocketed by almost 200 per cent for the sector between 2018 and 2022, causing many shippers to switch back to road transport. This series of problems fuels fears of a further ‘reverse modal shift’. Rail freight carriers achieve varying results in these turbulent circumstances. Here is an overview of the ‘winners and losers,’ of which the latter group is clearly the largest.

PKP Cargo up by 32%

Despite road transport dominating the transport sector in Poland, Poland remains optimistic about the competitiveness of rail. For example, the second largest rail carrier in Europe, PKP Cargo, reported a 32 per cent increase in EBITDA. This amounts to almost 200 million euros. With a net profit of approximately 23 million, the company absorbed the 2022 loss last year, which then amounted to approximately 1 million euros. This happened despite a decline in volumes (-16 per cent) and performance in tonne-kilometres (-18 per cent).

Lineas loses in several areas

Lineas describes itself as the largest private rail freight operator in Europe. In 2023, the railway company made a loss of 39.5 million euros on a turnover of 479 million. In 2022, the loss was 100 million euros. The company currently has a total debt burden of more than 300 million euros. However, last year, the Belgian state increased its share in Lineas from 10 per cent to 45 per cent through the government fund SFPIM.

Last year, the fund, together with another shareholder, Argos Wityu, invested 20 million in the company to get it back on track financially. Lineas needed 100 million euros at the time. These two parties are now jointly investing another 30 million in the company. By converting bonds into capital, Lineas will receive a new capital injection of approximately 60 million euros in 2024. To get out of the red at the end of the year, the rail carrier still has to look for an investor with 50 million euros in their pocket.

Less freight and red figures for SBB Cargo

The Swiss SBB Cargo performed disappointingly and, to make matters worse, also recorded a financial loss. The company had a loss of 3.9 per cent freight tonne-kilometres in the period of 2022-2023. According to the most recent figures, the company made a loss of almost 191 million euros in 2022, almost 80 per cent of the total loss of parent company SBB in 2022. The year before, there was a loss of ‘only’ 1.2 million. According to the company, the huge difference was partly due to the loss of COVID support and a significant write-down of 130.5 million euros on the value of SBB Cargo.

Rail Logistics Europe: no loss, no win

Rail Logistics Europe, a subsidiary of the French state railways, made a profit last year but lost in other areas. Rail Logistics Europe includes Fret SNCF, which was initially fined 5 billion euros by the EU last year. This is because the carrier received that amount in illegal state aid between 2007 and 2019, according to the EU. In an agreement with the EU and the French state, the railway company was forced to abandon twenty freight transport routes instead of the 5 billion euro fine. Last year’s EBITDA of 128 million euros was cold comfort for the company.

Relegation for DB Cargo

DB Cargo is threatening to follow Fret SNCF’s footsteps because the EU recently launched a new investigation to see whether the state aid to the company should be considered market distortion. DB Cargo has suffered losses of more than three billion euros in recent years. In 2023, losses amounted to more than 500 million euros. To cover the losses, the German government invests around 300 million euros into the company every year. These losses are not visible at the Dutch subsidiary thanks to a generous settlement system of the German parent. DB Cargo NL reported a declining volume, from 21 to 20 million tons, and had a significant drop to 4,180 million train kilometres, but the most recent figures still show a profit of 2.5 million euros.

This article was originally published by our sister publication NT.nl

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