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Railtrack profit braked
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November 13, 2000: 7:19 a.m. ET
UK railroad operator posts 31% drop in pretax profit; £250M charge seen
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LONDON (CNNfn) - Railtrack PLC, Britain's railroad track and stations operator, reported Monday a 31 percent drop in first-half pretax income, matching analysts' expectations, and said it would take a special charge of £250 million in the second half in part to pay penalties related to last month's train wreck that killed four people.
Railtrack, which has been faulted for the Oct. 17 crash, said its pretax income in half-year ended Sep. 30 dropped to £175 million ($250 million) from £252 million a year earlier. The range of forecasts by analysts polled by Reuters was from £151 to £180 million.
Revenue fell by £11 million to £1.275 billion.
The one-time charge of £250 million to Railtrack is related to the cost of compensating train operating companies, which have lost money because Railtrack has imposed speed restrictions at many points in its network after the crash at Hatfield, north of London, and closed others to allow it to re-lay roughly 250 miles of track. The company said a broken rail was to blame for the Hatfield accident. 
"The terrible accident at Hatfield means quite rightly we have to stand back and review everything," Railtrack Chief Executive Officer Gerald Corbett said in a statement. "The accident has highlighted the huge pressures which face Railtrack of matching the investment needed to make up years of under-investment, the unprecedented growth and the drive for performance."
Railtrack said it invested a record £1.2 billion in rail infrastructure, an increase of 36 percent from the same period a year ago. Overall operating costs rose by £64 million to £1.08 billion because of inflation, maintenance costs and rising depreciation. Excluding inflation, operating costs fell slightly.
On the London Stock Exchange Monday, shares of Railtrack (RTK) slipped 41 pence, or 4.2 percent, to 941.5 in midday trading. 
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