WARSAW: PKP Cargo, one of Europe's largest rail operators, has announced a strategic agreement with HZ Cargo, the Croatian national rail freight company.

According to PKP Cargo, the deal provides it with access to the recently upgraded ports of Rijeka and Ploce, the use of HZ terminals, and rail access within the Baltic-Adriatic corridor (right) that now includes Austria, the Czech Republic, Hungary and Slovakia.

Commenting on the tie-up PKP Cargo CEO Adam Purwin noted: "As the transport services in certain European countries are dominated by national carriers with market share reaching seventy to eighty percent, such strategic alliances with the local leaders remain in most cases the only attainable formula to develop international activity."

The move comes as PKP Cargo announces an 18 percent increase in net profit for 2014 to €66.35 million on revenues of €1.02 billion. The result does not include the cost of a voluntary redundancy program launched in the fourth quarter that reduced staff numbers by 3,041 at a cost of €63.75 million. Highlight of the year, according to Purwin, was the purchase of an 80 percent stake in AWT, the second largest rail company in the Czech Republic.

In 2013 PKP Cargo was floated on the Warsaw Stock Exchange by Poland's state railway PKP and raised €290 million for almost 50 percent of the subsidiary. At the beginning of 2015 PKP Cargo announced it would purchase 20 new locomotives at a cost €96 million. PKP says it plans to spend an estimated €84 billion on upgrading Poland's rail infrastructure by 2020.