The Supervisory Board of Deutsche Bahn is experiencing growing concern over the unclear future of the state-owned company. The reason is the tense financial situation. Although the Deutsche Bahn achieved a similar value to the operating result of EUR 2.11 billion in 2018 as a year earlier. After taxes, however, according to SPIEGEL information only an annual profit of 542 million euros left - about 30 percent less than in 2017.
"If the railways paid out a dividend of 650 million to the state, that would come out of the substance of the company," warns a member of the supervisory board, who demands from the executive board to have an orderly, balanced budget presented. "Paying a dividend would actually be insane," says the railway overseer.
In recent years, the state-owned company had each transferred several hundred million euros to the Minister of Finance. However, this was a zero-sum game: the federal government has invested the money directly back in the rail network via rail.
Time is short with regard to the preparation of the company for the coming years. In November there had already been a strategy meeting of the railway inspectors. At the beginning of the year, three appointments of the Executive Board were made to Federal Minister of Transport Andreas Scheuer.
It was all about the big questions: How can the train be more punctual, transport more people and goods, and be economically successful? The fact that it is possible to make money from rail traffic is shown daily by private competitors who travel on the same rail network.
"Almost no other option"
Concerning the funding gap of the railway, there is currently only the proposal on the table to sell the British subsidiary Arriva. The company operates public transport services in many European countries, including water taxis in Amsterdam and Copenhagen, as well as part of the red buses in London. Arriva is currently valued in the business books of the railway with approximately 2.5 billion euro. It is unclear how much a sale would actually bring in Brexit times.
"The board has almost no other way to get fresh money than the Arriva sale," says an insider. This is all the more important as the railway will break its debt limit of 20 billion euros and urgently rely on extraordinary income. CEO Richard Lutz has prescribed the company a strict austerity program and looks at every single measure that costs money.
It lacks four billion euros
The best thing would be for the management to bring Arriva to the stock market. However, because the mood on the capital markets is slowing down and IPOs are likely to become more difficult, sales are also conceivable. The main thing is that the train receives money for Arriva - wherever. The management already talks with investment banks about a possible mandate for an IPO or sale.
The Supervisory Board initially commissioned the Management Board on Wednesday to promote various options for an Arriva sale. In any case, this year, a budget gap of 2.5 billion euros has to be filled. In the coming years, the shortfall will rise to more than four billion euros. Where the money should come from is uncertain - especially if the Arriva sale fails.