Upward trend in rail transport continues: more passengers, higher revenues and greater investment
DB CEO Richard Lutz presents interim figures for 2018 • Profit down • Over EUR 100 million in additional investment to raise service punctuality • Deutsche Bahn to present updated strategy by end of year
Rail transport in Germany continues to grow. In the first half of 2018, patronage rose by 3.8% year on year in Deutsche Bahn's long distance segment, with a record 70.9 million passengers using the company's long distance trains from January through June.
"People are more mobile than ever before," said DB CEO Dr. Richard Lutz at the company's interim results press conference for 2018. "For more and more people, rail is becoming the key to an effective climate change fight and a successful transition to sustainable transport." Lutz said that DB had made it a top priority to foster digitalization and launch new services and mobility options for its customers. DB was working hard on ideas and solutions to this end and would be presenting an updated Group strategy by the end of the year.
At EUR 21.5 billion, adjusted revenues at the DB Group were 2.3% higher in H1 2018 than in H1 2017. Calculated in comparable terms (that is, adjusted for currency effects and changes to the group of consolidated companies), the increase was a full 3.8%. For 2018 as a whole, DB expects to see a comparable increase in revenues to some EUR 44 billion.
DB generated earnings before interest and taxes (EBIT) of EUR 974 million in H1 2018, a year-on-year decrease of EUR 205 million, or 17.4%. This decrease was due in particular to special charges resulting from inclement weather, a drop in rail freight transport volumes, and higher investment in punctuality. In 2018 alone, DB plans to increase investment by over EUR 100 million to raise its on-time rate. For 2018 as a whole, the DB Management Board expects full-year EBIT to be at the same level as EBIT in 2017 (adjusted figure for 2017: EUR 2.15 billion).
DB Arriva and DB Schenker, DB's international business units, continued to grow. "Our international subsidiaries both play an important role in driving success at the Group as a whole," said DB CEO Lutz. All DB's logistics segments were up in the first half of the year; air freight volume saw a year-on-year increase of 5.9%. DB Schenker generated revenues of EUR 8.3 billion in H1 2018, an increase of 2.8%. DB Arriva saw revenue growth of 1.7% to a total of EUR 2.7 billion.
Transport volume in long distance passenger service grew considerably in the first half of 2018, rising 6.0% year on year to 20.6 billion passenger kilometers.
Rail freight transport, on the other hand, saw a 6.7% drop in volume. The first six months of the year were not easy for DB Cargo. The company plans to respond by making lasting changes, which will include addressing problems of its own making.
Infrastructure usage continued to grow, with demand for train paths rising 1.1% to 540 million train-path kilometers. At 31.9% in H1 2018 (up from 30.8% in H1 2017), the percentage of infrastructure usage attributable to non-DB rail companies rose once again.
Net capital expenditure was up considerably in the first half of 2018, from EUR 1.5 billion to EUR 1.9 billion. This increase of EUR 0.4 billion is part of the largest investment campaign in the history of Deutsche Bahn, which continued in the first half of 2018.
Deutsche Bahn also hired additional employees, recruiting 13,300 people in Germany in the first half of the year. The company plans to have roughly 19,000 new hires by the end of the year. As of the end of June, DB employed some 202,500 people in Germany (compared with some 196,500 at the same time last year) and 329,600 worldwide (compared with 319,700 at the same time last year).
"Things are moving in the right direction," said CEO Lutz. "Traffic is shifting to rail. And we on the DB Management Board are confident that the coming years will bring excellent opportunities for DB as a company in a growing industry and as the most eco-friendly mode of transport by far."