The organisation, which manages the UK’s rail infrastructure from its national centre the Quadrant at Milton Keynes Central railway station, invested a record £3.4 billion in the expansion of Britain’s rail network over the last 12 months.
New stations, new services, new facilities and new railway lines have been built or brought into use over the last year. The expenditure- double the £1.6 billion level of five years ago – is part of an investment that includes almost £3 billion over the year replacing worn out assets.
Finance director Patrick Butcher said: "The railways continue to grow in popularity and we continue to invest heavily to respond to that demand.
"While progress is being made in improving performance, safety, asset reliability and delivering more renewals and projects, our rate of acceleration in these areas is not yet where we want it to be.”
The fall in profits is due to a drop in revenue of £246 million. Operating profit is down to £1,735 million from £2,001 million in the previous financial year but Network Rail, as a not for dividend company, does not have shareholders to receive a split of any surplus. That surplus is reinvested in the railway.
The reduced figure follows a decision by the Office of the Rail Regulator that Network Rail should require a smaller margin to manage its business in the current 2014-2019 funding period.
An accounting loss on "financial hedges", which was reported as a gain of more than £300 million last year, had turned into a loss of £41 million, also affecting the profit figures.
Passenger numbers grew by 67.3 million last year to reach a record 1.65 billion. The figures have more than doubled over the past two decades but more passengers are arriving on time than ever before, even though Network Rail is still not hitting its punctuality targets.
Mr Butcher said: “With more than a million more trains on the network than ten years ago, there are inevitable challenges. We are determined to do more to improve and action is being taken to quicken the pace of change.”