Poor punctuality, losses after tax and DB Cargo overshadow DB Group results

The Deutsche Bahn Group on Thursday published its annual results, announcing a positive operating result and being back in the black. Yet behind the positive headlines there are not-so-positive takeaways from the results, such as a loss-making freight division, poor punctuality and a loss after tax for the group. In fact, DB is headed for steep operational losses in the current financial year.

DB logistics subsidiary DB Schenker generated an operating profit of 1.8 billion euros in 2022, DB’s annual results show. DB Schenker’s record profit helped push the DB Group operating result to 1.3 billion euros and, thus, back to black. A major increase in the number of passengers also contributed to the positive results.

According to DB, the company carried 2 billion people last year, an increase of 40 per cent of the year prior. The increase in the number of passengers on the long-distance services was up by 60 per cent. According to DB CEO Richard Lutz, the company is on track for a record number of long-distance passengers in 2023, perhaps even exceeding 150 million.

DB reported 4.8 billion euros in tickets sold, with DB Regio seeing an increase of 1 billion euros in sales. This was in part due to the success of the so-called 9-euro ticket, which enabled travellers to make use of regional trains and other forms of public transport for a flat fee for an entire month. Available in June, July and August, DB sold 52 million 9-euro tickets in total. DB Arriva was also operationally profitable in 2022, the parent company said.

‘2022 marks turning point’

However, DB Cargo is some 600 million euros in the red, and burdened by high operational costs. DB’s overall punctuality also reached a new low in 2022, with only 65.2 percent of long-distance trains on time, compared to 75.2 per cent the year before. Germany’s infrastructure is also struggling to cope with demand, with DB saying that it is “too old, too prone to failure and doesn’t have enough capacity”. Finally, while the company’s earnings after tax are improving, 2022 too marks a year of loses (-227 million euros).

The impact thereof was not lost on Lutz. “The past year marks a turning point. It has become clear to everyone involved: We have to change course and approach the renovation and modernisation of the infrastructure in a completely different way.”

Chief financial officer Levin Holle also cautioned against too much optimism. “In a difficult environment in 2023, we have to make sure that we bring DB’s costs and income into a sustainable balance. This also includes reasonable wage agreements that are affordable for the company”. Earlier this week, DB was hit with one of the largest strikes in recent history, bringing train traffic to an almost complete standstill on Monday due to a wage conflict with the unions.
For the current financial year, DB is bracing for an operational loss of around 1 billion euros.

Further reading:

• Passenger train and rail freight services back on track in Germany
• Deutsche Bahn back in the eye of the storm over finances and restructuring
• All quiet on the German train stations