Jungfraubahn Group Increases Positive EBITDA In Q1 & 2

Though the Jungfrau Railway Group saw some positive developments in the first half of 2021, the period was still overshadowed by the coronavirus pandemic and the associated restrictions. In the first half of the year, 137,400 visitors travelled to Jungfraujoch - Top of Europe. That is 36.6% more than in the corresponding period in the previous year, which had been affected by the lockdown and an almost three-month closure of all tourist railways. The loss amounts to CHF 9.8 million (2020: loss of CHF 11.5 million). Despite the challenges associated with the coronavirus pandemic, the Jungfrau Railway Group again generated positive EBITDA of CHF 10.5 million, a year-on-year increase of 77%. From the current perspective, the company expects again positive EBITDA for the year 2021 as a whole.

Despite the crisis, the company stands on a solid foundation and even after the completion of the V-Cableway project, the company boasts a very high equity ratio of 72.4%. As has always been the case, it is important to maintain a sound balance between the optimum deployment of resources and the greatly fluctuating demand. For this reason, the Jungfrau Railway Group made use of short-term planning, with regard to both the deployment of staff and rolling stock. The Jungfrau Railway Group continues to use short-time work as an instrument. Despite the challenging situation, the Jungfrau Railway Group has been able to perpetuate a good, broad offer for the benefit of the entire Jungfrau region. This strategy will continue to be employed.

VISITOR FREQUENCIES              2021    2020 Change 
                                                in % 
1.1.-30.6. 
Jungfraujoch (arr.)           137,400 100,600  36.6% 
Skier visits                  706,000 744,700  -5.2% 
Jungfrau Ski Region 
NET TRANSPORT REVENUE         in TCHF in TCHF   in % 
Jungfraujoch - Top of Europe   14,510  13,723   5.7% 
Experience Mountains            3,852   3,527   9.2% 
Winter Sports                  16,391  17,785  -7.8% 
Total transport revenue        34,753  35,035  -0.8% 

Greatly fluctuating frequencies due to periods of bad weather

In the first half of the year, the daily number of visitors to Jungfraujoch - Top of Europe fluctuated substantially. This was often due to the bad weather and the uncertain weather forecasts. As a result of the coronavirus pandemic, international guests - whose demand is less weather-dependent - mostly stayed away. In the first half of 2021, most of the visitors to Jungfraujoch came from Switzerland. Guests benefited from various campaigns in connection with the ski pass or multi-day passes for the railways and cableways as well as the skilifts in the region. A total of 137,400 guests visited Jungfraujoch - Top of Europe, an increase of 36.6% over the previous year, when Jungfraujoch - Top of Europe was closed for 83 days due to the lockdown.

High level of agility required - good winter season

In its Experience Mountains segment, the Jungfrau Railway Group generated net transport revenue of CHF 3.9 million, an increase of 9.2%. In this segment too, substantial fluctuations in the number of visitors, which depended on the weather, represented a major challenge.

Compared to other regions in Switzerland, the Winter Sports segment performed well, especially owing to the opening of the V-Cableway. Following a bumpy start in January with bad weather and the cancellation of the Lauberhorn races, an upturn occurred starting from February. Thanks to the good snow and weather conditions, the winter sports season 2020/ 2021 was able to be extended until 25 April 2021 in some areas. Though the number of skiing visits in the entire Jungfrau Ski Region (collaborative product in which the Jungfrau Railway Group holds an interest of over 60%) dropped by 5.2% to 706,000 compared to the previous year (season 2019/2020), the number of skiing visits in the core area Kleine Scheidegg-Männlichen amounted to 457,900, an increase of 5.2% that was possible thanks to the new V-Cableway. In the reporting period, the pro-rata transport revenue in this area amounted to CHF 11.9 million, almost the same as in the corresponding period in 2020 (CHF 11.7 million).

As predicted the V-Cableway has generated a noticeable activity increase for winter sports in the Jungfrau Ski Region, including by strengthening public transportation and saving visitors some 47 minutes for the trip from Interlaken Ost to the ski slope. However, many visitors consider a winter sports experience without open restaurants and bars in the ski resort to be incomplete. This restriction in the field of catering had a negative impact on the number of visitors and on the average time that guests spent in the winter sports resort.

Short-time work continues - V-Cableway dismantling work and Mürren Railway renewal

In 2021, short-time work remains an important instrument to secure as many jobs as possible in the region. Thanks to the flexibility of employees, operation and deployment can be planned at shorter notice than previously. Operating costs continue to be kept low.

The completion and dismantling work for the V-Cableway, the main strategic project, will be finished by autumn 2021. The work was delayed because there was still a lot of snow in spring, especially on Eigergletscher. Full project accounting will take place by the end of the year. Overall, costs are expected to exceed the original planning by 10% (especially due to project modifications and difficult construction conditions). As a supplement to the V-Cableway, the Wengen shuttle will go live in 2023. With this investment in the future, it will become even easier to travel to car-free Wengen by train.

The work in connection with the overhaul of the Grütschalp-Mürren adhesion railway, including the Grütschalp and Winteregg stations and the Mürren railway station, is progressing according to plan. The first intensive phase for the renewal of the track was completed on 4 June 2021. Further phases will follow, and the renovation work will be finished by the end of 2023, when the new rolling stock will be commissioned. Thus, the requirements of the Swiss Disability Discrimination Act for public transportation will be duly and punctually complied with. The investments of about CHF 50 million for the upgrade of the Lauterbrunnen-Mürren mountain railway (BLM) are covered by the Canton of Bern.

Outlook

Business performance will depend on how the coronavirus situation in Europe and worldwide continues to unfold. For the last two months, the number of tourists coming to Switzerland from the Gulf States and the USA has increased again. A higher vaccination rate in the global population could result in the normalisation of international travel behaviour. Especially for the Asian market entry regulations need to become more predictable. On the other hand, virus mutations give rise to risks.

Unfortunately, business performance in the high-season months of July and August was not as desired. As a result of the poor weather conditions, about 110,000 guests visited Jungfraujoch - Top of Europe (previous year: 153,000). If the weather cooperates, numerous guests from Switzerland and neighbouring countries can be expected in autumn. Moreover, some initial bookings from Asia have been received for the fourth quarter. Nevertheless, this does not change the fact that a large portion of the about 70% Asian guests to Jungfraujoch continue to stay away. However, the Jungfrau Railway Group is convinced that sticking to its long-term strategy of focusing on international markets will pay off. The potential is great and is amplified by the once-in-a-generation V-Cableway project with the Eiger Express, the world's most modern tricable gondola.

In view of the success of last season, which, thanks to the V-Cableway in the Kleine Scheidegg-Männlichen area, was one of the best in recent years, the company is confident with respect to the winter season 2021/2022.

From the current perspective, the company reckons with positive EBITDA for the year 2021 as a whole, despite the expected loss.