Deutsche Post earnings down

Deutsche Post, the German postal group, reported first-quarter core earnings down 2 per cent yesterday, largely because of costs associated with its acquisition of Airborne of the US and weakness in its key mail division.

The group said the costs of integrating Airborne resulted in its earnings before interest, tax and amortisation falling to {XEU}930m ($1.1bn) in the three months to March, compared with {XEU}951m a year ago.

However, the group said the contribution from Airborne, along with positive business developments at DHL Express and its logistics unit, drove a near 8 per cent rise in revenues to {XEU}10.5bn. Josephine Cumbo, London Copyright Financial Times Limited 2004. All Rights Reserved.

> Mon May 17, 2004
>
>The JOURNAL of COMMERCE ONLINE
Mail, acquisition costs hit Deutsche Post net but affirms full-year profit forecast
>
>Deutsche Post World Net said Friday its net income slid 12 percent in the
>first quarter from a year ago on lower sales in its mail division and
>higher spending on integrating acquisitions into its DHL express delivery
>unit.
>
>But the Germany company — Europe’s biggest mail, express and logistics
>group — said it still expects full-year operating profit will grow by
>between 5 percent and 10 percent from 2.98 billion euros $3.5 billion in
>2003, driven by growth in its logistics and finance businesses, to $4.25
>billion in 2005.
>
>Net income in the three months to March 31 fell to $520.4 million from $590
>million in the year-earlier period but revenues rose 7.8 percent to $12.4
>billion from $11.5 billion on higher sales in express and logistics.
>Operating profit was down 2.2 percent at $11.5 billion.
>
>The results underscored the success of the company’s $7 billion
>acquisitions of logistics and express operators aimed at compensating for
>the loss of its mail monopoly in Germany in 2007. Mail generated 74 percent
>of total earnings, down from 81 percent a year ago, but accounted for less
>than a third of revenues. Revenue outside Germany jumped 20 percent to $5.7
>billion in the first quarter, accounting for 45.7 percent of total sales.
>
>Express revenues grew by 25.6 percent to $5 billion in the quarter and
>operating profit was 17.1 percent higher at $48.4 million.
>
>The acquisition of Seattle-based Airborne helped U.S. revenues more than
>double to $1.25 billion from $507.4 million. Operating losses were on
>target at $173.5 million including $57.8 million spent on integrating the
>DHL and Airborne networks. The company said it expects the Americas region
>to break even in 2005.
>
>
>Logistics revenues rose 10.8 percent to $1.8 billion and operating profit
>surged 43.9 percent to $69.6 million, with a strong performance by the DHL
>Danzas Air & Ocean forwarding unit compensating for a $52 million currency
>loss.