Deutsche Bahn Faces Substantial Losses as Restructuring Efforts Accelerate
State-owned railway company reports a €1.8 billion deficit for fiscal year 2024 amid significant operational challenges and ongoing reforms.
Deutsche Bahn has reported a substantial loss of approximately €1.8 billion for the fiscal year 2024, indicating an improvement of nearly €1 billion compared to the previous year's losses.
The adjusted operating loss before interest and taxes (EBIT), accounting for inflation, stood at around €333 million, reflecting a decrease of about €1.8 billion from the prior year.
This financial recovery is largely attributed to government support, which has assisted in offsetting high costs related to essential maintenance operations that operated at a deficit during 2023.
Significantly, Deutsche Bahn continues to grapple with financial challenges following the sale of its former logistics subsidiary, DB Schenker, to Danish competitor DSV. Historically, DB Schenker was a major contributor to Deutsche Bahn's profitability, generating an operational surplus of approximately €1 billion in 2024. Following the completion of this sale, expected within the current year, Deutsche Bahn will no longer benefit from these earnings.
In light of these ongoing challenges, the company plans to utilize the proceeds from the DB Schenker sale, estimated at around €14.3 billion, to address its substantial debt burden.
The company's total liabilities have slightly decreased by €1.4 billion to €32.6 billion in the previous year, with a goal to further reduce this figure to between €26 and €28 billion by 2027.
Richard Lutz, CEO of Deutsche Bahn, has described the current situation as "the largest crisis since the railway reform," highlighting a significant decline in punctuality rates for long-distance services, which fell to a historic low of 62.5% last year.
The rail network faces pressing needs for modernization, with Lutz acknowledging that the company failed to meet customer expectations and operational targets in critical areas.
To tackle these challenges, Deutsche Bahn is implementing a comprehensive restructuring program, focusing on operations, infrastructure, and finances.
Modernization initiatives are already in progress, alongside strategic staffing reductions.
The company aims to reduce its workforce by about 10,000 positions by the end of 2027 compared to 2024 levels.
Furthermore, Deutsche Bahn has set a target to improve punctuality for long-distance services to between 75% and 80% by 2027, alongside its aspirations to achieve operational profitability in the current fiscal year.
The adjusted operating loss before interest and taxes (EBIT), accounting for inflation, stood at around €333 million, reflecting a decrease of about €1.8 billion from the prior year.
This financial recovery is largely attributed to government support, which has assisted in offsetting high costs related to essential maintenance operations that operated at a deficit during 2023.
Significantly, Deutsche Bahn continues to grapple with financial challenges following the sale of its former logistics subsidiary, DB Schenker, to Danish competitor DSV. Historically, DB Schenker was a major contributor to Deutsche Bahn's profitability, generating an operational surplus of approximately €1 billion in 2024. Following the completion of this sale, expected within the current year, Deutsche Bahn will no longer benefit from these earnings.
In light of these ongoing challenges, the company plans to utilize the proceeds from the DB Schenker sale, estimated at around €14.3 billion, to address its substantial debt burden.
The company's total liabilities have slightly decreased by €1.4 billion to €32.6 billion in the previous year, with a goal to further reduce this figure to between €26 and €28 billion by 2027.
Richard Lutz, CEO of Deutsche Bahn, has described the current situation as "the largest crisis since the railway reform," highlighting a significant decline in punctuality rates for long-distance services, which fell to a historic low of 62.5% last year.
The rail network faces pressing needs for modernization, with Lutz acknowledging that the company failed to meet customer expectations and operational targets in critical areas.
To tackle these challenges, Deutsche Bahn is implementing a comprehensive restructuring program, focusing on operations, infrastructure, and finances.
Modernization initiatives are already in progress, alongside strategic staffing reductions.
The company aims to reduce its workforce by about 10,000 positions by the end of 2027 compared to 2024 levels.
Furthermore, Deutsche Bahn has set a target to improve punctuality for long-distance services to between 75% and 80% by 2027, alongside its aspirations to achieve operational profitability in the current fiscal year.
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