May.2 (NBD) -- China Railway Corporation (China Railway) reported 2017 annual results last Friday, with yearly revenue standing at 1.02 trillion yuan (160.2 billion U.S. dollars), up 11.9 percent year on year, and total profits at 60.795 billion yuan (9.5 billion U.S. dollars), a year-on-year rise of 53.35 percent.

After-tax profit hits record high

According to the report, about 68.37 percent of total revenue came from transportation business, a record high over the past five years.

In comparison, passenger transportation contributed more to the total revenue than freight transportation, but the gap between them is narrowing.

It’s noteworthy that in 2016, China Railway reported profitable after being taxed. The before-tax profits of the company registered -1.173 billion yuan (-184.2 million U.S. dollars), with the tax of -2.249 billion yuan (-353.2 million U.S. dollars), creating net profits of 1.076 billion yuan (169.0 million U.S. dollars).

The company reported improving profits this year. Its before-tax profits climbed to 12.468 billion yuan (2.0 billion U.S. dollars), while its after-tax profits rose to 1.819 billion yuan (285.7 million U.S. dollars), a year-on-year increase of 69.05 percent.

However, China Railway is still facing loss in its transportation business. In 2017, the cost of transportation services stood at 769.527 billion yuan (120.9 billion U.S. dollars), which was higher than revenue created.

Debts continue to surge

The debts of China Railway has amounted to 4.99 trillion yuan (800 billion U.S. dollars) by 2017, 83.98 percent of which came from long-term debts, the report said.

Due to the scale of railway construction, the debts of China Railway have climbed but kept within an appropriate range, said in a report released by China Lianhe Credit Rating Co., Ltd in mid 2017. 

Last year, China Railway gained a total loan of 697.464 billion yuan (109.5 billion U.S. dollars) at home and abroad, a decrease of 30.07 percent compared with the previous year.

But there is still a large amount of money that needs to be repaid. In 2017, the company repaid a total of 540.507 billion yuan (84.9 billion U.S. dollars).

Investing in railway domain has to be patient because it usually takes a decade or more to recover the cost of investment and even gain profits, said commentator Xie Weifeng last year.

In recent years, China keeps investing in railway construction.

According to the website of China Railway, fixed railway investments stood at 801 billion yuan (125.8 billion U.S. dollars) in 2017 and another 732 billion yuan (115.0 billion U.S. dollars) is expected to be spent as fixed railway investments in 2018, which will help construct 4000 kilometers of new rail roads, including 3500 kilometers of high-speed railway.

Email: tanyuhan@nbd.com.cn