Germany’s Deutsche Bahn (DB) Group has reported a significant operating loss of €677 million for the first half of 2024, a steep decline from the previous year. The rail giant blamed a combination of factors, including infrastructure weaknesses, severe weather, and strikes, for the poor performance.

The company’s core business, the Integrated Rail System, which encompasses mobility, rail freight, and rail infrastructure, incurred a loss of €1.2 billion.

On the other hand, the logistics unit, DB Schenker, which is up for sale, remained profitable, however, even its contribution was insufficient to offset losses in the core business. While the Group said the sale of the unit is proceeding according to plan, the list of interested bidders has slimmed down.

First, the Danish shipping giant A.P. Moller-Maersk (Maersk) has walked away from bidding following an in-depth review. The Saudi company Bahri was the next to withdraw from the DB Schenker acquisition race. The remaining potential buyers are DSV and a consortium comprising CVC, ADIA and GIC. Bahri’s reported bid of €15 billion was the highest, however, after being contacted by PCJ’s sister site, RailFreight.com, DB declined to comment on the withdrawal, citing the confidential nature of the sale process, with the Group currently in the due diligence phase.

DB’s capital expenditure increased by 35 per cent to €4 billion in the first half of 2024, driven by government funding aimed at infrastructure improvements. However, despite significant investment, the rail network continues to face challenges, with punctuality rates falling to 62.7 per cent for long-distance services compared to 68.7 per cent in the same period last year.

The company has announced plans to invest an additional €21 billion in infrastructure in 2024, focusing on projects like the modernization of the Riedbahn line between Frankfurt and Mannheim. This is part of a broader strategy to improve network reliability and reduce disruptions.

DB Cargo also faced challenges, with a 10.2 per cent decline in freight volumes and an operating loss of €261 million. The company is undergoing a transformation and expects to benefit from new government support for single-wagon transport in the second half of the year.

Despite the challenges, DB Group maintains its target of achieving an operating profit for the full year. However, the company acknowledges the need for significant cost reductions and operational improvements to achieve this goal.