Author`s name Pravda.Ru

Deutsche Bahn to expand operations

Deutsche Bahn AG reported profit growth by 2.1 percent last year as Germany's state-owned railway boosted cargo traffic and cut its debt to help prepare for a share sale.

Net income increased to 1.72 billion euros ($2.72 billion) from 1.68 billion euros a year earlier, the Berlin-based company said in documents released before its annual press conference. Sales rose 4.2 percent to 31.3 billion euros.

Germany's coalition government between the Social Democratic Party and Chancellor Angela Merkel's Christian Democrats is split over plans to sell shares in the railway. One proposal would separate train operations from the track network prior to an initial public offering, with the tracks remaining state property because taxpayers would pay for its maintenance.

Chief Executive Officer Hartmut Mehdorn has made acquisitions expanding Deutsche Bahn beyond its main passenger and freight train operations. The railway bought Brink's Co.'s U.S. freight-delivery business in November 2005 for $1.1 billion. The company paid 3.6 billion euros in 2002 for Stinnes AG, a German trucking and warehousing business.

Deutsche Bahn is optimistic for 2008 after the first quarter "went well," the company said.

Passenger traffic declined 1 percent last year amid a dispute with train engineers over pay that lasted more than six months and disrupted operations, deterring customers. Fright traffic climbed 2.5 percent, Deutsche Bahn said.

Deutsche Bahn AG is the German national railway company. It came into existence in 1994 as the successor of the former state railways of Germany: the Deutsche Bundesbahn of West Germany and the Deutsche Reichsbahn of East Germany. It also gained ownership of former railway assets in West Berlin held by the VdeR.