DB Group Reports US$363 Million Operating Profit in First Half of 2023

Despite the challenging environment, with ongoing inflation and falling freight rates on international freight markets, DB Group as a whole generated an operating profit (adjusted EBIT) of US$363 million in the first half of 2023. 

However, operating profit was over US$540 million (around 62%) lower than in the first six months of 2022, due in part to DB's higher expenses up front for improvements to the infrastructure.

DB Group's adjusted revenues totaled roughly US$27 billion in the first half of 2023 (compared with roughly US$31 billion in the same period of 2022).

Dr. Richard Lutz, Chairman of the Management Board and CEO, in Berlin said: "We aren't even close to tapping the full potential for demand. That is good news for DB and for the climate.

DB Group Makes a Return to Profitable Business

"The support for rail shows us that continuing to invest in more climate-friendly rail transport is crucial, even in challenging times. At the same time, we are committed to increasing our profitability."

In addition to the general increase in costs and DB's much higher expenses for the rail network, changes in the Group's operating profit compared with the first half of 2022 were largely due to industry-wide normalization of freight rates in air and ocean freight.

As expected, this global development affected DB's logistics subsidiary, DB Schenker. "Even though freight rates in air and ocean freight are normalizing, DB Schenker generated a significant operating profit of EUR 626 million in the first half of the year," Lutz said.

The logistics subsidiary's positive contribution to DB Group's bottom line was nearly three times higher than before the pandemic. In 2022, DB Schenker generated the largest profit in its history, due in part to freight charges, which were extremely high throughout the world at that time.

DB spent considerable funds up front in the infrastructure in the first half of 2023 including much more on maintenance.

"Despite the difficult financial situation, we greatly increased our spendings for a better infrastructure. This will be a one-time injection until the higher funding from the Federal Government that has been announced takes effect next year," said Dr. Levin Holle, CFO.

DB Group expects these factors to lead to a significant operating loss for the full year, as it noted back in March. However, the operating loss is now expected to be lower, at slightly less than US$1.1 billion.

The Group's revenues are likely to be around US$56 billion. All predictions depend on further developments and are subject to a high level of uncertainty.

Read More: DB Schenker and Volvo Cars Partner to Reduce Emissions in Ocean Freight