Northern Rail saw its profit almost halve in 2014, as reduced Government grants contributed to a 11.5 per cent fall in turnover.
Operating profit for 12 months to January 3 dropped 49.4 per cent to £17.8m, from £35.2m the previous year.
Despite this, the company - which is a joint venture between Serco and Abellio - paid out dividends of £17.8m across the year.
Northern Rail’s current franchise agreement for North of England is set to end on April 1 2016.
From April 1 2014, the firm entered into a Network Rail control period, resulting in a £79.4m cut to its Department for Transport grant.
Its overall grant income fell £83.1m, which was the “major contributing factor” to the 11.5 per cent reduction in turnover to £568.3m for the year.
The business, which employs 5,000 people and has a portfolio of 464 stations, saw passenger revenue up 6.1 per cent to £243.5m.