Deutsche Bahn Faces Profit Decline Following Schenker Sale

Germany’s national railway operator anticipates a significant profit drop of 70% next year due to Schenker’s sale. The sale, finalized with Denmark’s DSV, is projected to reshape Deutsche Bahn’s financial outlook. These insights, derived from internal documents accessed by Reuters, underline pivotal challenges ahead.

Deutsche Bahn expects an operating profit of €700 million in 2024, including Schenker’s contributions. This was reported by the railway transport news portal Railway Supply.

However, post-sale, the projected figure for 2025 sharply drops to €200 million. The company’s 2023 target of earning €1 billion in EBIT faced disruptions within its inter-city services, impacting performance metrics.

Schenker Sale Drives Strategic Shift

DSV’s agreement to acquire Schenker for €14.3 billion is pivotal for Deutsche Bahn’s strategic goals. The deal enables Deutsche Bahn to focus on its domestic railway operations while addressing its substantial €33-billion debt burden. These priorities align with management’s focus on streamlining operational core activities.

Financial Outlook After Schenker Sale

Interest payments on Deutsche Bahn’s debt continue to strain the company’s financial health. The Schenker deal is expected to alleviate this burden, supporting plans for profitability by 2027. The rail operator aims to achieve a bottom-line profit of €1 billion, despite predicting a €500-million loss next year.

The company refrained from commenting on the revealed figures, maintaining a strategic silence. However, analysts view the sale as a double-edged sword—reducing debt but cutting off a profitable revenue stream. The path ahead requires disciplined execution to meet ambitious financial targets.

Source: www.reuters.com

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