June 21 (Bloomberg) -- French ferry operator Societe Nationale Maritime Corse Mediterranee, controlled by Europe’s largest water company Veolia Environnement SA, will eliminate 415 jobs next year to lower costs and pay for new vessels.
The cuts will be done on a “voluntary” basis and by not replacing those who retire, the unprofitable company said in a statement following a supervisory board meeting late yesterday. Another 100 jobs will be eliminated from 2017. SNCM will invest in two vessels now and two more in 2016, according to the statement.
Veolia, with a 66 percent stake in SNCM, is seeking to reduce holdings in transport businesses that have weighed on the water utility’s earnings. Transdev, the mass-transit operator partly owned by Veolia, is selling its German operations as part of a broader asset-disposal plan, two people with knowledge of the matter said last month.
SNCM, presently in talks over renewing a contract to provide ferry service to the island of Corsica, has been plagued by labor strife in the past.
Political representatives including Roland Blum, deputy mayor of Marseille, criticized the job cuts that are backed by the government, which holds a 25 percent stake in SNCM.
Veolia took an impairment loss of 77.8 million euros on non-current assets of SNCM in 2011 and 35 million euros in 2012, according to the waste and water utility’s latest annual report. The ferry operator had a net loss of 27.5 million euros last year compared with a 68.9 million-euro loss the previous year.
Veolia announced it will increase cost-cutting and organize operations along geographic lines following a slump in first-quarter earnings and its handling of industrial waste.
Chief Executive Officer Antoine Frerot is seeking to turn the utility around by reducing debt and improving profitability on contracts.
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