Deutsche Bahn Cuts Profit Forecast on Slower Growth and Floods
German rail operator Deutsche Bahn AG cut its forecasts for sales and profit as slower economic growth hurts the company’s freight business and flooding in Germany weighed on passenger traffic.
Earnings before interest and taxes adjusted for one-time effects will decline to about 2.2 billion euros ($2.9 billion) this year from 2.7 billion euros in 2012. Deutsche Bahn previously forecast more than 2.8 billion euros. Sales will rise about 0.5 percent to 39.5 billion euros, compared with an earlier forecast for about 41 billion euros.
“After a very good year 2012, we are facing some extraordinary challenges,” Chief Financial Officer Richard Lutz said in a statement.
Shipping companies are struggling as the countries sharing the euro endure the longest recession since the currency was introduced. Excess capacity of container ships is also depressing sea freight rates, as is competition in European overland transport.
First-half profit fell 29 percent to 554 million euros as sales dropped 0.6 percent. Deutsche Bahn pared its forecasts for growth in overall global sea freight volumes to 2 percent from 4 percent. The company now expects global air freight to decline 1 percent, compared with an earlier forecast for unchanged volumes.
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