German state-owned rail company Deutsche Bahn (DB) was able to increase its year-on-year net profit by 25.9 percent in 2011, the transport giant announced on Thursday. Earnings totaled 1.3 billion euros (US$1.73 billion) last year - up from 1.058 billion euros in 2010.

Revenues rose by 10.1 percent to reach a record of 37.9 billion euros.

"All in all, 2011 was a very good year, both for our clients and our employees," Deutsche Bahn chief executive, Rüdiger Grube, said in Berlin.

Rising passenger numbers were credited as the main reason for the boost in profits.

DB said it had had 3.8 million more customers in 2011 than in the previous year. In addition, the rail operator, which is 100 percent state-owned, logged a 5.8 percent increase in freight handling.

Chief executive Rüdiger Grube said the rail operator had also improved its services.

"Not only did we improve our economic and financial performance last year, we also took big strides in improving our range and the quality of our service to customers," Grube said.

Welcome windfall

The company paid 525 million euros in dividends to the federal government, but indicated it would have preferred to have invested the money in new infrastructure projects.

But German Transport Minister Peter Ramsauer insisted the government receive the money, saying it would help plug holes in the national budget.

"It's quite normal for shareholders to receive dividends," Ramsauer said in a statement.

DB paid its first dividend last year, following a decision by German Chancellor Angela Merkel's coalition government, aimed at bringing down public debt.

The company claims to be Europe's most profitable transport operator, and said on Thursday it hoped to double its revenue to reach 70 billion euros by 2020.

It is part of an ambitious "DB 2020" strategy, which includes an objective to become one of Germany's most favored employers and a leader in environmental protection in the transport sector.

Deutsche Bahn currently employs 293,000 people worldwide. It says the figure will "rise considerably" in the next eight years.

hg/za (AFP, dpa)