Deutsche Bahn CEO Says Timing's Right to Launch IPO
Deutsche Bahn is in a good position to sell a stake in the state-run rail operator in a public stock offering, its chief executive said Thursday.
The announcement came as Deutsche Bahn reported higher passenger figures and raised its full-year sales forecast.
"Now is the right time for Deutsche Bahn and Germany to seize this opportunity," CEO Hartmut Mehdorn told reporters.
He said the company, which has restructured itself and moved to acquire cargo operations both in Germany and abroad, is ready to compete on the open market.
"Deutsche Bahn has become a company that's internationally well positioned," he said, as the company said its 2007 outlook for sales would grow by 5%, higher than the 3% it had initially forecast earlier this year.
The Berlin-based rail operator, which is currently 100% owned by the government, has been gauging likely interest from institutional investors for an initial public offering, a move that Mehdorn himself said he favors, instead of a partial sale to a specific investor or buyer.
His remarks came as the company said its pretax profit in the January-June period rose 44% to 1.35 billion euros ($1.82 billion) on a 5.8% gain in sales to 15.3 billion euros ($20.64 billion). It did not release net results.
The number of passengers carried on DB trains and buses rose to 1.3 billion, about 21 million more than the same time last year.
The company said that its overall debt had been reduced to 658 million euros ($887.84 million).
"As we previously announced, we are able to use our free cash flow from our operational business to reduce our debt," said Diethelm Sack, DB's chief financial officer. "Furthermore, we anticipate -- barring any unforeseen events -- that growth for the full year 2007 will slightly exceed the forecast we made in March."
Regarding ongoing talks with the train divers' union GDL, Mehdorn said the dispute was so far manageable, but acknowledged it had hurt sales.
The train drivers' union is seeking a pay increase of up to 31% for its members and a wage agreement specific to drivers, or train engineers.