DB Group Makes a Return to Profitable Business

DB Group Makes a Return to Profitable Business

DB Schenker makes largest contribution with most successful first half ever

Deutsche Bahn (DB) has returned to profitable business. For the first time since the Covid-19 pandemic began, DB has generated an operating profit, returning DB to its path of profitable growth.

DB closed out the first half of 2022 with adjusted earnings before interest and taxes (EBIT adjusted) of $897 million. Group revenues increased by 28.4% to roughly $29 billion. Many more passengers used DB's regional, local and long-distance services.

Demand for international freight forwarding and logistics was also higher than ever before. "Our turnaround has been successful," said Dr. Richard Lutz, CEO of DB, in Berlin. "Demand is booming and we have returned to profitable business."

Operating profit (EBITD adjusted) was up by around $1.95 billion compared with the first half of 2021. At that time, the global Covid-19 pandemic had driven DB into the red, to the tune of nearly $1.02 1 billion.

Altogether, DB's core business of rail transport lost over $10.2 billion due to the Covid-19 pandemic. DB Schenker, DB's logistics subsidiary, made the largest contribution to DB's current success by far. It nearly doubled its operating profit compared with the first six months of 2021 to around $1.22 billion.

CFO Dr Levin Holle highlighted DB Schenker's performance in addition to the strong upswing in DB's core business: "The first half of 2022 was Schenker's most successful half-year in its 150-year history as a logistics company.

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"DB Schenker played a major role in bolstering the DB's favorable performance overall."

DB Arriva, DB's local transport provider in Europe, also made progress in the first half of 2022. The company lifted its adjusted EBIT year on year and performed as expected overall.

Holle cited the sharp rise in inflation, and “ballooning energy prices” in particular, as a major economic challenge. For the short term, he said, energy price hedges were in place for a number of major areas.

Ultimately, though, DB was not immune to the overall price trends that would be seen going forward.

There is a great deal of uncertainty associated with the forecast for 2022 as a whole since the war in Ukraine and the Covid-19 pandemic remain unpredictable.

Nevertheless, DB expects to close out the year with much higher revenues and a much better operating profit than forecast in March.

DB currently expects an adjusted EBIT of more than 1.02 billion for the year as a whole. Revenues are expected to grow to more than $55.2 billion.

Read More: DB Schenker Covers Over 1.5 million Kilometres with Electric Vehicles

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Transport and Logistics ME