Release Date:
Release ID: 769

DB Group stays on track to success in the first six

Significant increase in transport performance - Revenues up 19.1

percent - EBIT doubled to 936 million euros - EBIT forecast raised to

1.9 billion euros - Turnaround at Railion

Press Release

Deutsche Bahn AG continued to stay on track to success during the first six months of 2006. The company set new records in transport performance, revenues and operating profit. Never before has Deutsche Bahn transported more passengers in a comparable period of time. At the same time, rail freight transport performance reached a new peak. Revenues rose by 19.1 percent to 14.5 billion euros due to significant increases in rail transport and international logistics (first six months of 2005: 12.2 billion euros). On a comparable basis, excluding the newly acquired US logistics services provider BAX Global, revenues rose by 8.1 percent.

The operating profit, or EBIT (Earnings before Interest and Taxes), showed a significant improvement of 480 million euros to 936 million euros (first six months of 2005: 456 million euros). DB Group achieved significant EBIT improvements across virtually all business units. Whereas the Long-Distance Transport business unit has been back in the black since last year, the Railion business unit achieved the turnaround. Both the Schenker and Regional Transport business units also showed a strong performance.

"These outstanding results provide the economic foundation for an initial public offering. Building upon our successful track record, combined with additional investments, will enable us to continue the transformation of DB Group to a leading international mobility and logistics service provider," said CEO and Chairman of the Management Board, Hartmut Mehdorn, on Monday in Frankfurt.

In its updated forecast for the 2006 financial year, the company expects a higher profit, primarily driven by further revenue growth and positive effects from ongoing efficiency programs. Overall, DB Group expects to generate revenues in excess of 28.5 billion euros (2005: 25.1 billion euros) and an EBIT of 1.9 billion euros (2005: 1.35 billion euros). This represents an additional EBIT improvement of approximately 300 million euros compared with the forecast published in March 2006.

Based on this performance, the key value management figure ROCE (Return on Capital Employed) will continue to rise in the 2006 financial year (2005: 5.0 percent).

Significant Increase in Rail Transport Performance Rail passenger transport performance was up 5.1 percent to 36.2 billion passenger kilometers in the first six months of 2006. As a result, our market share increased in an otherwise stagnating passenger transport market. This performance was attributable, among other factors, to the additional passenger volume generated by the 2006 FIFA World Cup™ and to the opening of the new and upgraded Nuremberg–Ingolstadt–Munich and the upgraded Leipzig–Berlin lines.

The continuing high demand for our special price offers also had a positive effect. The Long-Distance Transport business unit achieved an increase of 5.4 percent, and both the Regional and Urban Transport business units also reported growth in rail transport performance.

In rail freight, the Railion business unit also increased its transport performance by 11.3 percent to 48.0 billion metric ton kilometers. Railion Deutschland AG, with a 9.1 percent increase in transport performance, was above the level of German freight transport market growth. Overall, the German rail freight transport business grew at a double-digit rate.

Significant growth in logistics business The Schenker business unit, including BAX, was able to continue its positive performance. With a revenue increase of 45.1 percent compared with the first six months of 2005, Schenker benefited from the strong growth of the international logistics markets. In addition to the strong performance of existing business operations, the increase in revenues was bolstered by the first time inclusion of BAX. As a result of the strong growth of the Schenker business unit, the revenue share contributed by our transport and logistics activities increased. At the same time, the revenue share of our activities outside Germany, based on segment revenues, rose from 23 percent to 32 percent. In European land transport, the Schenker business unit successfully defended its position and significantly increased its shipment volume. It also reported strong growth in its air and sea freight businesses, with growth rates above the market average. Additional growth potential on key routes has already been exploited as a result of the acquisition of BAX.

Capital expenditures remain on a high level Track infrastructure remained the main focus of capital expenditures. Gross capital expenditures, rising by 19.7 percent to 2.4 billion euros, were substantially higher than in the first half of 2005. Considering the 93 million euros increase in third-party investment grants, net capital expenditures amounted to 1.5 billion euros (first six months of 2005: 1.2 billion euros). "We are continuing our rail infrastructure modernization programs with high levels of capital expenditure,” said Mehdorn.


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