Deutsche Post could register higher loss than expected in US
Analysts are beginning to doubt that Deutsche Post, the German postal service operator, will be able to limit its losses in the US this year as planned. The company had said in the spring that it intended to maintain its losses in the US at around the same level as for last year, when they totalled 284m euros. However, the loss sustained by the company’s US activities in the first half of 2004 amounted to 229m euros. The loss in the US has been attributed to the cost of integrating US company Airborne, which Deutsche Post acquired last year, and to the fact that the company’s market share is still low at 9 per cent.
Experts believe that it will be difficult, but not impossible, for the company to break even on the US market next year. The company’s business outside the US has been considerably more successful: in the second quarter, Deutsche Post increased its ebita by 45 per cent to 752m euros. In particular, this was due to strong growth in the express and logistics division and to the flotation of Postbank, the banking subsidiary of the company, from which the company obtained a net profit of around 75m euros. In view of the positive results for the first half of the year, Deutsche Post now expects to increase its ebita by 7.5 to 12.5 per cent in 2004, having previously predicted growth of 5 to 10 per cent.
Original article by Ileana Grabitz
Abstracted from Financial Times Deutschland
