Deutsche Post says 2005 net profit rose 40 percent to EUR2.23 billion
Deutsche Post AG said its 2005 net profit rose by 40 percent to €2.23 billion (US$2.65 billion) because of demand for its logistics service and said its annual earnings would likely reach double that amount by 2009.
The world's biggest logistics business and the owner of shipper DHL said the net profit compared with €1.6 billion in 2004.
Revenue for the year rose 3.3 percent to €44.6 billion (US$53 billion) from €43.1 billion.
Fourth-quarter figures won't be released until March 14, when the Bonn-based company unveils full details of its results.
The company also said it would likely earn as much as €5 billion (US$5.9 billion) annually by 2009, with its express, logistics and financial services unit contributing at least €1 billion (US$1.9 billion) while its mail unit would likely account for another €2 billion (US$2.4 billion).
"It is now clear that our corporate strategy over the last few years is bearing fruit," Chief Executive Klaus Zumwinkel said in a statement. "Our competitive advantage is founded on the broad and stable positioning of the group, the rapid integration of growth driver Exel, and the increased sales performance brought by BHW in financial services."
Deutsche Post bought British-based Exel PLC for €5.5 billion in September, making it the world's No. 1 logistics business with a work force of approximately 500,000 people.
The company made the deal in part to reinforce its logistics business as a buffer for expected revenue declines from its mail business in Germany, where it is due to lose its monopoly to new competitors by 2007.
On Monday, Deutsche Post said it would take a majority stake in Britain's Williams Lea Group Ltd., paying €370 million (US$440.2 million) for 75 percent of the company with an eye toward acquiring it completely. Deutsche Post said it plans to use the British company to augment its own document management and logistics business.
Shares of Deutsche Post were up less than a quarter of a percent to €23.40 (US$27.84) in Frankfurt trading.
Deutsche Post slides after FY figs as Express unit disappoints UPDATE
AFX UK ProFeed 02-15-2006
FRANKFURT (AFX) – Shares in Deutsche Post AG were sharply lower in late afternoon trade after the company reported full-year 2005 results that included a disappointing performance by the Express unit due to an impairment charge, which prompted a downgrade at equinet, dealers said.
At 3.47 pm, Deutsche Post was 0.86 eur or 3.67 pct lower at 22.57, while the DAX 30 index was down 5.52 points or 0.10 pct at 5,757.88.
'These figures have a number of twists and turns — the net result of which is a bit light but generally okay,' ING said in a note.
It added that the results at group level slightly beat consensus but that there were several one-offs that confused the overall picture, including the Express unit suffering a 434 mln eur impairment loss on goodwill at its DHL Americas operations.
The one-offs result in the underlying performance coming in some 100 mln eur below ING's expectations, the broker said, adding that while the impairment charge at DHL Americas is 'disappointing' it 'cannot get too upset' as it is non-cash.
'Moreover, reflecting on the challenges that DHL Americas has faced, one should not be terribly surprised at the impairment,' ING said.
The broker has a 'hold' rating and a 26 eur price target on Deutsche Post.
'Given the underperformance of Express the earnings quality of Deutsche
Post's results is poor, in our view,' equinet said in a note, adding though that the group figures were in line with its expectations.
equinet noted that the Express unit only reported an EBIT of 11 mln eur because of the 434 mln eur impairment charge, but that even if that one-off is excluded the division underachieved Deutsche Post's target of a 500 mln eur EBIT and the broker's own estimate of 575 mln.
'Furthermore, the company will not disclose any details regarding the
development of the trouble spot Express Americas (which together with) he postponed break-even is disappointing,' it added.
The broker downgraded its rating on the issue to 'reduce' from 'hold' and reiterated its 20 eur price target.
Meanwhile, one dealer said that the results were in line with market expectations, that there were no spectacular aspects, and that the outlook was conservative.
Deutsche Post said its full-year EBIT reached 3.755 bln eur, up 25.1 pct from 2004 thanks to strong performances at all of its businesses except for the Express unit.
The EBIT result slightly exceeded Deutsche Post's target of 3.6 bln eur.
Deutsche Post's full year sales rose 3.3 pct to 44.594 bln eur and its net profit climbed 39.9 pct to 2.235 bln eur.
The mail carrier also reiterated that it plans to pay a 2005 dividend that is at least one-third higher than the 2004 payment.
Deutsche Post did not provide an outlook for 2006, however, it said that it plans to achieve a group EBIT of at least 5 bln eur by 2009.
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