Arcandor insolvency hits DHL

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Deutsche Post DHL’s contract logistics business turned in a loss of 81 million euros in the third quarter after taking a charge of 141m euros as a result of the insolvency of Arcandor, the German home shopping and department store group.

Sales in contract logistics were down 11.6 per cent to 3.1bn euros. The group said  that excluding the Arcandor effect, third-quarter operating earnings would have risen despite the decrease in revenue.

The group saw total sales fall 18.6 per cent to 11.2 billion euros in the third quarter but cost savings meant that underlying EBIT was only ten per cent down at 378m euros.

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Chief executive Frank Appel (pictured) said: “Although we see initial positive signals with the stabilisation of transport volumes, there’s still no indication of a full-scale economic recovery. Therefore we can’t ease up; we must accelerate our efforts.”

Strict cost management in the Express Division meant that profitability increased despite continuing steep drops in volume, and the withdrawal from the domestic US express business. At 131 million euros, underlying EBIT was up on the previous year’s level of 24 million euros.

Reduced fuel surcharges and generally lower freight rates meant that sales in the Global Forwarding, Freight Division dropped 30.4 per cent to 2.6 billion euros, while purchase prices for transport services climbed steeply. Underlying EBIT fell to 76 million euros as a result.

The Group has raised its previous target of 1.2 billion euros for underlying EBIT for 2009 to at least 1.35 billion euros.

* Two international trade union organisations have launched a worldwide week of action calling on DHL to honour promises on corporate social responsibility.

The UNI Global Union and the International Transport Workers’ Federation say they want DHL to agree to co-operation and dialogue with trade unions in all countries where it’s active.

The week of action, including meetings with management and demonstrations outside DHL offices, takes place this week (9th – 13th November).

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