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British transport company National Express (NEX.L) swung to a pre-tax loss of £444m ($620m) last year as the coronavirus pandemic took its toll on passenger numbers.
The Birmingham-based firm saw an 80% fall in customer numbers over the 12 months due to national lockdowns which forced people to stay at home to prevent the spread of COVID-19.
Earnings also tumbled 64% across the period amid reduced demand for its bus and coach operations in the UK and in Spain, its school buses in the United States, and its German rail contract.
For the year to the end of December 2020, National Express posted earnings before interest, tax, depreciation and amortisation (EBITDA) of £187m, compared with £510m the year before.
The company said it has reduced costs across the business, exited certain contracts and accessed government schemes to ensure it emerges from the pandemic “leaner, fitter and financially stronger.”
In its trading update National Express said: “The situation we find ourselves in is not one that we can ultimately control and the timing of full recovery remains uncertain as we are still subject to lockdowns and related restrictions in every market we operate in.”
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It plans to move to a fully zero emission fleet in the UK, with some 29 electric buses now running in the West Midlands.
Coventry is set to become the first electric bus city with significant funding secured for up to 170 electric vehicles over the next two to three years.
Ignacio Garat, National Express group chief executive, said: “As a business we have an important role to play in modern society and I want us to continue to be at the forefront of the debate on climate change and the role we can play in social mobility.
“We have a strong and diverse international transport platform that has demonstrated its resilience in recent months. We have a clear set of priorities to ensure we will return to growth in a prudent and safe manner. We will be competing to win"
The FTSE 250 group will not be paying a dividend as a result of a tough year.
Jack Winchester, analyst at Third Bridge, said: "Until COVID put a roadblock in the way, National Express had been a reliable cash generator for several years. Now two big questions loom over the company.
"Investors are wondering when passengers will start using their services again and be happy to sit in close proximity. The coach operator also faces a growing regulatory risk. In Spain government regulations look set to make retaining higher margin bus contracts much more difficult. Our experts expect this to hurt the company’s profitability over the medium term."
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