DHL reduces loss in US Express
Deutsche Post announced yesterday, 3rd Quarter results up by a third on 2005.But the performance of its US Express division is a continuing cause for concern, dragging the rest of the Express business and the whole group down.
Headline growth was impressive, with consolidated revenue up by 35% to *14,887m and EBIT up 40% to *1.03bn compared with the same period last year. But these figures are flattered by the acquisition of Exel in early 2006. Trends in the underlying operational performance were less satisfactory.
The logistics business continues to perform reasonably. The Exel acquisition is running smoothly and the Division as a whole is gaining market-share. Revenue for the nine months was up to *16 billion, with *8.6billion coming from the acquisition of Exel. EBIT for the year-to-date was *513 million.
The problem area remains Express. The US Express division continues to lose money, although losses have been reduced by what was called a “three digit million euro amount”. CEO, Klaus Zumwinkel stated both in comments to analysts and in an interview earlier this week that the US Express business had 10% market share and that if it achieved 12% “we would be very happy”. He stuck by the forecast for breakeven in the US as 2009. Elsewhere the company described growth in Express as strong, with double-digit growth in revenue in Asia-Pacific. Overall results for Express revenue were down over Q3 2005 by 2.8% at *3,755million but EBIT was back in positive territory at *86million.
Mail is also subdued with DPWN failing to tap fully into growth in Germany, but it is growing its International business partly through acquisition. EBIT was up 7.3% at *428million on revenues up 3.5%.
Results for group were boosted by the redemption of bonds relating to the equity of the finance division.
The Group has stuck to its forecast of revenue in 2006 of *60billion, with EBIT of *3.9billion, with Logistics Division being the major motor of growth.
