"Worst Financial Crisis": Railroad incurs historic loss

The corona virus plunges Deutsche Bahn into the worst financial crisis since its inception. Even before the pandemic, the company was experiencing considerable difficulties – especially in freight transport. For the full year, the state-owned company now expects a record loss.

The corona crisis left Deutsche Bahn deep in the red and caused the biggest loss in its history in the first half of the year. The state-owned company announced the minus after taxes amounting to 3.7 billion euros. Regular operations resulted in a loss of 1.8 billion euros before taxes and interest payments. The railroad estimated that this would increase further to 3.5 billion euros in 2020 as a whole.

"The virus abruptly slowed down our successful growth course and plunged Deutsche Bahn into the worst financial crisis since its inception," admitted train director Richard Lutz. Nevertheless, the group will continue to invest and continue to hire because of the government's climate protection program. In the first half of the year alone, 19,000 applicants were accepted.

In addition to the operating loss in the first half of the year, there was a special depreciation on the value of the local transport subsidiary Arriva of 1.4 billion euros, further special effects and tax payments. This led to a loss of EUR 3.7 billion, which the Group has never had in a year since it was founded in 1994.

Sales fell to 19.4 billion euros from 22 billion euros in the same period last year. However, the railways had considerable difficulties before the Corona crisis, especially in freight transport. Debt rose so rapidly that the group could no longer pay for the most necessary investments from its own resources. According to business circles, net financial debt is now over 27 billion euros, more than three billion euros higher than at the beginning of the year.

The federal government wants to support the railways with, among other things, a capital injection of over five billion euros. In spite of the passenger slump in the crisis, the company had continued to operate up to 90 percent of its trains at the request of the federal government. Although more people are traveling again, the occupancy rate was still around half of the pre-Corona period.