German Rail records billion Euro loss after troubled year
AFP · 16 Mar 2016, 13:19
Published: 16 Mar 2016 13:19 GMT+01:00
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Deutsche Bahn said in a statement it booked a bottom-line loss of €1.3 billion last year, its first year-end loss since 2003, due to exceptional writedowns of €1.7 billion on its freight business.
But the operator, which is also facing fiercer competition from long-distance bus companies, as well as in its regional networks, was also hit by the costs of a train drivers' strike earlier in the year.
As a result, underlying or operating profit declined by 17 percent to €1.76 billion.
On the other hand, revenues topped €40 billion for the first time, rising by 1.9 percent to €40.5 billion, and passenger numbers in the long-distance business increased by 2.2 percent to 132 million.
At the same time, the number of passengers using the bus and regional rail services of its regional arm, DB Regio, declined by 1.2 percent to 2.5 billion.
Short of targets
"As pleased as we are about the positive numbers, we also have to be self-critical: we didn't achieve what we had been targeting," said chief executive Rüdiger Grube.
In the cargo business, the volume of freight transported declined by 4.3 percent to 98.4 billion tonne-kilometres.
Division chief Berthold Huber said that a reorganisation of the business was "necessary" and some 430 cargo stations across the country would come under scrutiny, without providing any concrete details about the number of possible job cuts.
German news agency DPA quoted sources close to the supervisory board as suggesting that 3,500 jobs could be affected.
Deutsche Bahn's mixed performance in 2015 comes at a time when the state-owned company is planning massive investments to improve the quality of its service and network.
According to plans revealed at the end of last year, Deutsche Bahn hopes to invest 55 billion euros in modernising its infrastructure until 2020, with 35 billion euros to be put up by the state and around 20 billion euros to come from Deutsche Bahn's current cash flow.
Looking ahead to the current year, Deutsche Bahn said it is targeting sales of 41.5 billion euros and a return to profit of around 500 million euros "following the exceptional situation in 2015," said finance chief Richard Lutz.
In addition to efficiency-boosting measures and cost-cutting of around 700 million euros by 2020, Deutsche Bahn is planning a partial privatisation of its DB Schenker Logistics and DB Arriva units.
German media reports have suggested that the government is not particularly keen on those plans, but CFO Lutz said Deutsche Bahn had had "constructive discussions with its owner" on the matter.