The first private rail company is growing, with more passengers using the service, more trains running between Rome and Milan, frequent arrivals into Milano Centrale train station, new routes and more destinations linked by its high-speed trains. And its economic standing is improving too
Things are looking up for Italy’s private train operator. The company behind the high-speed Italo trains with elegant burgundy livery is moving from the red into the black. It will be a while before its 2015 results are officially presented, but it is already clear that there will be a marked improvement on all previous years, with debt down by €100 mn, a profit margin of approximately 15% and consequently a positive Ebit of more than €45 mn.
The turnaround is down to the great determination of the shareholders, who share the same goals and have decided to step up their commitment to the Italo project: Intesa Sanpaolo, Diego Della Valle, Luca Cordero di Montezemolo and Gianni Punzo, along with Assicurazioni Generali and the Bombassei and Seragnoli families. Invaluable support is provided by Flavio Cattaneo, who showed his faith in the project by buying a stake in the company. These long-standing Italian shareholders (the French railways have chosen to make an exit) have agreed to increase the capital by up to €100 mn, with €60 mn of this already taken up and the remaining €40 mn approved if necessary.
Cattaneo has previously served as the Ceo of Fiera Milano (where he oversaw the group’s successful listing), the head of Rai (whose audience surpassed that of Mediaset under his leadership) and the Ceo of Terna (for nine years from the listing onwards, with exceptional business and financial results). He has been at the helm of NTV (Nuovo Trasporto Viaggiatori) since February last year and he has immediately had a positive impact: after the services and marketing were overhauled, the number of passengers increased from 6.6 mn in 2014 to 9 mn in 2015. He has also got its finances back on a healthy footing by negotiating with its lender banks (Intesa Sanpaolo, Banco Popolare and MPS) to restructure its debt. The deadlines have been postponed to 2028 and 2030, giving a €100 mn improvement in the company’s financial position.
Within the company, Cattaneo made an agreement with employees to save jobs in exchange for pay cuts (which are already smaller this year), while increasing productivity. Consequently, there are now departures on the Rome-Milan line every 30 minutes at peak times. Crucially, they include arrivals in Milan’s important Central Station and the main stations of the other cities covered. Among the other significant moves are an increase in services from 48 last winter to 56, a twofold increase in services to and from Reggio Emilia’s high-speed station and the launch of an Italobus to connect the network to seven towns and cities in the central Po Valley: Carpi, Cremona, Mantua, Modena, Parma, Piacenza and Sassuolo.
The company has taken on a brand new face and it has big plans for the future. For example, it has ordered eight new «Pendolino Italo» trains for 2018 from Alstom Ferroviaria. They will be 187 metres long, carry 480 passengers and travel at 250 kilometres an hour. Alongside the 25 existing AGV 575s, they will take the total number of trains in the fleet to 33. Another important part in Cattaneo’s development plans will be played by the South of Italy, where he wants to expand the Italobus service from Naples and Salerno. However, those who know him are certain that Cattaneo and the other shareholders will not stop there. They are determined to take their high-speed services to other busy routes, including Milan-Venice, the Adriatic coast and Bari-Naples.