Thursday 27th Oct 2016 - Logistics Manager

Profits slip at Deutsche Post

Deutsche Post World Net saw its first quarter net profit fall 18.4 per cent to 407 million euros but said that both the logistics and express businesses performed well.

Underlying EBIT rose 6.4 per cent to around one billion euros, meeting the group’s targets, it said. Reported EBIT declined 14.7 per cent to 851 million euros due to non-recurring expenses at Deutsche Postbank tied to the crisis on the financial markets. Revenue totalled 15.7 billion euros, up 1.8 per cent from the year earlier period, excluding negative currency effects the increase was around 6 per cent.

“Given the working day effect and the faltering US economy, business was very satisfactory in the first quarter,” said chief financial officer John Allan. “Both the Express and the Logistics businesses grew organically and we made good progress in our Roadmap to Value capital markets programme.”

The group said the Logistics division improved its operating performance across all businesses in the first quarter.

Despite negative currency effects, sales at DHL Global Forwarding rose by 7.4 per cent. Air-freight volumes outgrew the market with a rate of 6.6 per cent. The division also reported above-market growth in the ocean-freight segment, which raised revenue by 10.9 per cent.

However, exchange-rate effects led to a 4.2 per cent fall in revenue at DHL Exel Supply Chain. Organic revenue growth at the business reached 3.7 per cent with new business worth an annualised 250 million euros. In addition, 90 per cent of expiring contracts were renewed. Revenue in the DHL Freight segment rose by 0.9 per cent.

In March, the Logistics division was divided into the two: Supply Chain and Corporate Information Solutions headed by Bruce Edwards and Global Forwarding and Freight led by Hermann Ude. The new structure takes into account the growing business volumes and the two different business models and will be reflected in the group’s first-half report.

Revenue in the Mail division declined by 1.4 per cent to 3.9 billion euros in the first quarter, which was mainly due to the working day effect. The Mail division reported 9.2 per cent lower EBIT of 599 million euros. The German postal market was liberalised at the start of the year but the group said the effects had been limited so far.

The Express division saw growth in all regions except the United States. EBIT in the division fell 32 per cent to 21 million euros. The two major reasons for this decline were the fewer working days, which in particular had an effect on the European business, and the economic development in the United States.