GERMANY: DB Cargo expects to post a loss in 2026, the year its EU-approved restructuring plan was due to restore long-term viability. The rail freight operator must now renegotiate with the European Commission and is extending the restructuring to all 16 foreign subsidiaries.
Chief executive Bernhard Osburg said on 17 September, in remarks reported by German news agency dpa, that a break-even result is hardly possible this year. He attributed the shortfall to a one-off write-down on DB Cargo UK, which the company has put up for sale. DB Cargo has not issued a statement of its own.
The British subsidiary is carried in the books at around EUR 260m more than DB Cargo expects to receive for it, according to company sources cited by the agency. The write-down falls on the 2026 annual result.
What the state aid approval requires
The Commission approved EUR 1.9bn in German state aid to DB Cargo on 29 November 2024 under its guidelines on rescue and restructuring aid. It found the aid compatible with the internal market after assessing a transformation and restructuring plan meant to guarantee the company’s long-term viability by the end of 2026. In Germany the requirement is known as the black zero, a break-even result from 2026.
The aid itself was an open-ended profit and loss transfer agreement under which parent company Deutsche Bahn had covered DB Cargo’s losses since 2012. The Commission opened an in-depth investigation in January 2022 after a competitor complained, and examined four arrangements involving DB Cargo, three of them with Deutsche Bahn. Only the loss transfer agreement was found to be state aid.
That agreement has been terminated and has not applied since 1 January 2025. Deutsche Bahn no longer covers the freight subsidiary’s losses under it. The approval also rests on divestitures of DB Cargo activities and assets that Germany has committed to, which the Commission’s press release does not identify.
Restructuring moves beyond the home market
The restructuring has so far concentrated on Germany, where the plan removes roughly 6,200 of some 14,000 full-time positions. The chief executive said it will now cover the entire European business with its 16 foreign subsidiaries.
DB Cargo is examining which of those subsidiaries its European strategy requires. The report names none of them.
The argument to the Commission
The chief executive intends to convince the Commission that the German restructuring is on track. Without the write-down on the British subsidiary, he said, DB Cargo would have broken even this year. Earnings before interest and taxes (EBIT) stood at minus EUR 58m in 2025, according to the agency.
The sale of DB Cargo UK is being run with advisory firm Interpath. Whether it has been completed was not disclosed.