DB Schenker outperforms pre-pandemic results in H1, despite revenue loss

DB Schenker , the logistics arm of Duetsche Bahn Group , posted $11.2 billion in revenue, a loss of 29% year over year, in the first half of 2023, the company reported today. With a looming sale , DB Schenker outperformed its pre-pandemic figures, even with a decline in revenue and operating profits amid a flat market. [caption id="attachment_64295" align="alignright" width="248"] (Photo/DB Schenker)[/caption] WHY IT MATTERS : Following first quarter 2023 , DB Group leaders predicted operating losses to continue through the year, as demand and volume decreased industrywide. B Schenker’s H1 results are notably better than its 2019 results, creating optimism about a recovering market, a company release said. “Despite the difficult financial situation, we greatly increased our spendings for a better infrastructure,” DB Group Chief Financial Officer Levin Holle said in a statement. “This will be a one-time injection until the higher funding from the federal government that has been announced takes effect next year.” THE BIG PICTURE: As a whole, DB Group generated an EBIT of $364 million, a 62% decline YoY due to inflation, decreased volumes and “ DB’s higher expenses up front for improvements to the infrastructure,” according to a release from DB Group. DB Group’s total revenue declined YoY by approximately 1% to $27.5 billion. BY THE NUMBERS: DB Schenker’s 29% revenue dip is partially due to decreased volume: H1 airfreight volumes were 579,800 tonnes, a 15.2% YoY decrease. EBIT was $695 million, a 48% drop YoY. WHAT THEY’RE SAYING: DB Schenker’s H1 performance positively contributed to DB Group’s overall results and the company is pleased with its financials moving into the second half of the year. “We continue our pre-pandemic growth momentum in 2023,” DB Schenker Chief Executive Jochen Thewes said in the release. “Sustainability, digitalization and geographical expansion will be our engines going forward.” Deutsche Bahn AG board Chair Richard Lutz added: “DB Schenker can look back on a good first half of the year and, despite the normalization of freight rates, once again made a pleasingly high, positive contribution to the group result.” FLASHBACK: DB Schenker ranked at No. 4 for 2022 on Air Cargo Next’s Power 25 list of top forwarders at No. 4. It decreased airfreight tonnage by 7% but increased overall revenue by 9% for the year. In December 2022, the supervisory board of DB Group gave the DB management board the mandate to examine and prepare a possible sale of up to 100% of the shares in DB Schenker. “This examination is open-ended and will take some time; there is no specific target date,” a DB spokesperson told Air Cargo Next . “In the event of a positive decision after completion of the review phase, a separate decision will be made, and information provided on the start of a sales process and the nature of a possible sale. “Currently, no decisions have been made in this regard.” MARKET REACTION: DB Schenker ( NASDAQ: DB ) slipped 4.3% from Wednesday to $11.15 per market share at close today. FUTURE LOOK: DB Group expected a downward trend in volumes and demand in the first half of 2023, possibly continuing into the second half. However, the market shows signs of normalization, and the company is pleased with overall results as it continues to make improvements to its infrastructure, according to the company’s report. “We aren’t even close to tapping the full potential for demand,” Lutz said in the earnings report. “That is good news for DB and for the climate.” Join Air Cargo Next for the second annual Air Cargo Tech Summit on Monday, Sept. 18, and Tuesday, Sept. 19, at the Brussels Marriott Hotel Grand Place in Belgium. For more information on the summit and to register, click here .

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