City's Largest Turnover Expected to Be Sealed by SWK in 2024; Heavy Losses Reported in the Public Transport Sector
A Challenging Journey Ahead for Krefeld Utilities: economic strains and market hurdles revealed in 2024 annual report
The energy market's intense competition has taken its toll on customers for Krefeld's utility providers, SWK. Mandatory infrastructure advancements during the energy and heat transition necessitate substantial investments. Remarkably, the SWK Group reports the second-highest annual surplus in their history, amounting to 50.7 million euros, and provides the city with a record-breaking allocation.
Carsten Liedtke, SWK Board Spokesperson, acknowledges the cloudy legal and political surroundings that add to the complexity of maintaining basic services, yet affirms the company's resolve in making crucial decisions and striving for growth as an industry unaffected by the overall transformation. The company's consolidated results for 2024 depict a solid performance, with a total turnover of 2.38 billion euros, just below the previous year's figure. The annual surplus did take a dip from 83 million euros to 49 million euros, attributed mainly to the lower energy business results and the significant annual loss at SWK MOBIL.
As tradition, SWK AG contributed significantly to the city of Krefeld's 2024 budget. The total sum of approximately 50.7 million euros was accrued from the net dividend from the 2023 (12.25 million euros) and 2024 (24.54 million euros) business years, part of a profit carryforward from earlier years, and the 2024 concession fee of 13.88 million euros.
looming shadows
The present landscape for SWK MOBIL, the public transportation sector, is notably precarious. The recent implementation of GermanyTicket, a heavily discounted and subvention-aided fare model, did initially manage to win back confidence from passengers following significant loss during the pandemic. This resulted in a substantial increase in ridership, reaching 35.5 million passengers in the reporting year.
However, this influx of passengers brought forth an economic imbalance threatening the sustenance of local transportation throughout Germany. The revenues, bolstered by equalization funds from federal and state governments, are far from sufficient to cover the rising costs associated with personnel having newly negotiated wage agreements and substantial energy and material expenses. Consequently, the loss incurred by SWK MOBIL escalated in 2024 to a staggering 41.6 million euros – anew record high.
This grim outlook for the public transportation industry is driven by a myriad of factors, including mounting costs, subsidized ticket schemes, infrastructure deficiencies, and workforce issues. The current financial model faces challenges in balancing affordable fares while covering growing expenses, and potential solutions include rethinking ticket prices, securing more government funding, or streamlining services through standardization.
The public transportation sector must confront and adapt to these challenges to secure a sustainable, user-friendly mode of transport in the future.
Economic and social policy discussions may need to address the financial struggles of SWK Mobil, particularly in the wake of the mounting costs, subsidized ticket schemes, infrastructure deficiencies, and workforce issues threatening its sustainability. The need for growth in this sector, unaffected by overall transformation, becomes crucial as the current financial model faces challenges in balancing affordable fares while covering rising expenses.
Finance and business strategies will play a significant role in SWK Mobil's endeavor to secure a sustainable, user-friendly mode of transport. Potential solutions could include seeking additional finance, such as more government funding, or implementing efficient business practices like standardizing services to streamline operations and reduce costs.
