German Railways in declining trend
DB Cargo suffered an operating loss and caused DB to record a drop in Ebit
In the first half of 2018 DB Cargo suffered an operating loss of 127 million euro in earnings before interest and taxes (EBIT) against 28 million in the same period last year.
Traffic performance in tonne-kilometres fell by 6.7% from 47.8 billion in the first half of 2017 to 44.5.
Due to poor figures of DB Cargo, the EBIT results at parent company DB Deutsche Bahn also fell by 17.4% to 974 million euro despite turnover increased by 2.8% to 21.5 billion euro.
CEO Richard Lutz attributed the decline to bad weather and French rail strikes which impacted rail freight traffic. “We also faced problems of our own making, however, and we will be addressing those problems in a lasting way” he committed.
Lutz remains optimistic than DB will match its 2017 performance this year when it achieved an Ebit of €2.15bn. “The fact that we expect full-year Ebit to be roughly on par with last year’s figure despite a weaker first half of the year is due first and foremost to our expectations that we will catch up by the end of the year. You may remember that the Rastatt tunnel closure, and Cyclones Xavier and Herwart, made the second half of 2017 particularly difficult.”
DB Cargo has been in a reorganisation for years; freight transport by rail is under pressure and DB Cargo is struggling with a number of loss-making activities, such as the transport of wagons; since the latter are few managing wagons requires expensive shunting work.