LONDON - Network Rail Infrastructure Finance PLC (NRIF), the debt administration entity for Network Rail's Debt Issuance Programme (DIP), has reported its half-year results for the fiscal year 2024/25. The company, which is not issuing new debt and operates as the administrator of existing debt issues and derivatives, witnessed a reduction in finance costs due to a decrease in inflation on RPI-linked bonds.
For the period ending September 30, 2024, NRIF incurred finance costs of £833 million, a notable decrease from £1,232 million in the same period the previous year. The reduction in costs was attributed primarily to the lower inflation on RPI-linked bonds. The company also reported a gain of £100 million on the fair value of its debt due to increases in market interest rates during the period, compared to a gain of £2,541 million in the previous year.
NRIF's legacy hedging program, which consists mostly of interest rate and cross-currency swaps, is unwinding and resulted in a gain of £15 million, down from £30 million in the previous year. These gains and losses were passed through to Network Rail Infrastructure Limited (NRIL) in accordance with the intercompany loan agreement.
Despite these movements, NRIF reported a steady profit before tax of £55,000 for the period, consistent with the profit reported for the same period in the previous year. The company's net borrowings decreased slightly from £28,874 million to £28,796 million, mainly due to a decrease in market prices and a reduction in the Retail Price Index (RPI) from March to September 2024.
The credit ratings for the £40,000 million multi-currency note program within the DIP remain stable, with AA from Standard and Poor's (NYSE:SPY), Aa3 from Moody's (NYSE:MCO), and AA- from Fitch as of September 30, 2024.
NRIF's treasury operations, managed by NRIL, are conducted in line with policies approved by the Treasury Committee of the Network Rail board and are subject to internal audits and committee reviews. The company does not engage in speculative trades and aims to manage its liquidity to meet obligations while minimizing financial risks.
The directors confirmed that the interim financial information has been prepared in accordance with International Accounting Standard 34 as adopted by the United Kingdom (TADAWUL:4280). An independent review by an auditor found nothing to suggest that the interim financial statements were not prepared in all material respects in accordance with the applicable accounting standards.
This financial update is based on a press release statement from Network Rail Infrastructure Finance PLC.
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