Financial management

 

VR Group’s values in financial management

Responsibility is the VR Group value that provides a sound footing for financial management, and an objective-oriented approach directs its activities. This can be seen in its efforts to operate competitively and profitably, which in turn makes it possible to finance investments that serve customers.

 

Strategy for financial management

VR Group’s strategy for financial management is to work to the highest standards, and with the business operations to seek to create profitable growth. A strong balance sheet and cash flow financing obtained through growth create a firm foundation for the exceptionally extensive investments being made in the future and for developing business operations.

 

Financial management policies and their implementation

The goals, operating principles and risk management for financial management and security are defined in the financial management guidelines. Financial assets are managed in a productive and liquid manner with a low risk.

 

Results-based objectives for financial management 

Each year VR Group’s Board of Directors sets financial targets for the Group in line with the Group’s short- and long-term strategy. Business plans for each business unit are drawn up on the basis of the strategy. Ownership policy of the state is followed in financial targets. 

 

 


Successes and setbacks in financial affairs

+ Net result in profit, improved from previous year

+ Strong balance sheet and liquidity

+ VR Group has performed well in international comparisons


– Managing costs arising from challenging weather conditions and ageing rolling stock

– Weakening in demand in some business areas resulting from economic uncertainty

 


Opportunities and risks in financial management

+ Strong balance sheet: much of the financing for the exceptionally extensive investments in the next few years from the cash flow from operations, with borrowed capital available at a competitive price

+ Favouring eco-friendly forms of transport: a springboard for growth for logistics and passenger services

+ Opportunities for enhanced efficiency in business processes


– The effect of future and current competition on result

– Impact of global economic situation on demand

– Maintenance costs for ageing rolling stock

– Rising payroll expenses and prices for energy and materials

– Impact of poor condition of track in places on business operations related to rail services

 


Changes in systems or structures to improve financial management and financial results during the reporting period

– Enhancing cash management and finance planning

– Integrating treasury and financing functions more closely into business operations

– Developing content of monthly reporting

– Continuing project to update reporting system

– Continuing project to replace accounting system

– Developing payments processing