Deutsche Post reiterates 2004 ebita will rise as much as 13%

Deutsche Post AG, Europe’s largest postal service, reiterated that it expects profit to grow as much as 13 percent as the express division’s earnings rise.

Earnings before interest, taxes and amortization in 2004 will rise by 7.5 percent to 13 percent from the 2.98 billion euros ($3.59 billion) posted in 2003, Chief Financial Officer Edgar Ernst said in remarks published on the company’s Web site for an investors’ conference at its Bonn headquarters.

Deutsche Post on July 30 raised its 2004 earnings forecast after the sale of stock in the Deutsche Postbank banking unit helped boost second-quarter profit 87 percent. The company plans to spend 3.6 billion euros on expansion over the next two years with a goal of becoming the world’s biggest logistics company, and is considering a bid for 25 percent of Denmark’s postal service.

Deutsche Post expects the most growth at the express business, where 2004 Ebita is forecast to rise by more than 20 percent from the 408 million euros of 2003. Financial services profit, which totaled 566 million euros last year, will probably rise 15 percent and earnings at the logistics unit will rise 10 percent from 206 million euros in 2003.

Ernst didn’t give a forecast for the mail division, which posted Ebita of 2.04 billion last year.

The initial public offering of a third of Postbank, Germany’s biggest consumer bank by customer numbers, brought in 75 million euros of profit, which helped cut net debt, or long- and short- term debt minus cash and tradable stock, by 85 percent to 304 million euros as of June 30. The company aims to eliminate loans entirely by the end of the year.

Deutsche Post’s so-called Star cost-cutting program, which has a target of saving a cumulative 1.4 billion euros through next year, had added 601 million euros to earnings as of June 30 since its inception in November 2002. Star focuses on reducing duplication of services and scaling back unprofitable businesses.

To contact the reporter on this story:
Susanna Ray in Frankfurt at [email protected].

To contact the editor responsible for this story:
Dan Stets at [email protected].