Strong supply chain growth for Deutsche Post DHL

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Deutsche Post DHL more than doubled its reported earnings before interest and tax in the third quarter to 545 million euros.

Chief executive Frank Appel said: “Our strategy is robust, our efficiency programmes are paying off, and our customers are rewarding our efforts.”

In the Supply Chain division, despite the loss of the Quelle business in Germany and the systematic withdrawal from underperforming contracts, sales climbed 12.9 per cent to 3.4bn euros.

“New business in the first nine months of the year now totals 700m euros. In the third quarter, the efficiency programmes successfully introduced last year resulted in further margin improvements in every region. As a result, underlying EBIT rose significantly to 82m euros, after an operating loss of 84m euros was produced last year – also as a result of charges related to the Arcandor bankruptcy,” the group said.

The restructuring in the Express division helped push sales up 11.7 per cent to 2.7bn euros, primarily driven by significant increases in international shipments.

“This gain more than offset decreases in the day-definite domestic business, mostly resulting from the sale of the domestic express businesses in the United Kingdom and France. Higher income from fuel surcharges also contributed to the rise in revenue.”

Underlying EBIT rose from 131m euros last year to 194m euros in the third quarter of 2010, an increase of 48.1 per cent.

The Global Forwarding and Freight business profited the most from the recovery of the global economy in 2010. Sales rose 1bn euros to 3.7bn euros in the third quarter while underlying EBIT rose 34.2 per cent to 102m euros in 2010.

However sales in the Mail business fell 2.7 per cent to 3.2bn euros in the third quarter – mainly as a result the effects of the value-added tax on revenue with business customers that began on July 1 and the price discounts that were offered in response to the change.

“The ongoing substitution of physical letters by electronic media and the loss of the Quelle business in Germany negatively impacted revenues as well. In contrast, the parcel business in Germany continued to perform very dynamically.”

Underlying EBIT declined to EUR 259m euros in the third quarter of 2010 from 326m euros in the third quarter 2009.

For the first nine months of year, sales rose 11.2 per cent to 37.6bn while underlying EBIT increased 70.2 per cent to 1.6bn euros.

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