81 per cent profit boost for Deutsche Post DHL

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Deutsche Post DHL saw underlying profit (EBIT) rise 81.4 percent to 566 million in the first  quarter on sales up 4.4 per cent at 12 billion euros.

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“Our first quarter results demonstrate clearly that we are well prepared for the future: we have broadly improved our performance,” said chief executive Frank Appel. “But there is much more to accomplish. We will continue to press forward with the implementation of our Strategy 2015 and unlock the group’s full potential step by step.”

Reported EBIT climbed from 27m euros in the first three months of 2009 to 512m euros in 2010.

Sales in the Supply Chain division were down 0.5 per cent at 3.1bn euros but underlying EBIT rose 52 per cent to 64m euros.

The fall in sales was largely the result of the loss of business caused by the bankruptcy of the Arcandor Group in Germany and an underperforming contract in the United States that was not renewed in the second quarter of 2009.

However, additional contracts with new and existing customers totalled some 240m euros. Growth was particularly strong in the Asia-Pacific region, the group said.

Sales in the Express division in the first three months of 2010 jumped by nine per cent to 2.6bn euros. In the first quarter of 2009 the division made an EBIT loss of 120m euros but this year there was a underlying profit of 154m euros.

In the Global Forwarding, Freight division, the increase in volumes seen since the second half of 2009 accelerated in the first quarter of 2010. Sales were up 13.5 per cent at 3.1bn euros while underlying EBIT rose eight per cent to 54m euros.

The group said Volumes for both air and ocean freight rose sharply during the first three months compared with the previous year’s level. “Because demand is rapidly rising following the economic crisis, transport rates for air and ocean freight capacities have risen considerably. DHL did indeed secure additional capacities at an early stage. But the higher prices could not be completely passed on to customers.”

The Mail division saw a small dip in sales to 3.4bn euros while underlying EBIT was 4.2 per cent down at 390m euros. The group said that while the phase of crisis-related reductions seems to be largely over, the trend towards the increased substitution of physical letters with electronic media in the traditional mail business remained unchanged at the beginning of 2010.

For the full-year the group expects a continued recovery in global transport volumes and it confirmed its prediction of underlying EBIT between 1.6bn euros and 1.9bn euros.

The group  believes that the DHL division and the Mail division will contribute roughly the same amount to profits for the first time. While profits at the Mail division are expected to total between 1bn euros and 1.2bn euros, the projected amount for DHL is between 1bn euros and 1.1bn euros.

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