The week that was: 23 July 2010
UPS posts positive results, job losses in Jersey, and DHL begins African mission… Good afternoon, and welcome to Post&Parcel’s news round-up that bundles together all the top stories from another week in the mail and express industry.
With many ‘doom and gloom’ stories dominating the pages of Post&Parcel for some time due to the difficulties of recession, we were glad to see UPS announce diluted earnings per share of $0.84 for the second quarter of 2010 – a 71% jump over the adjusted earnings of the prior-year period. Global revenue increased 13%, generating a 57% increase in operating profit to $1.4bn. “UPS fired on all cylinders in the second quarter even in the face of a mixed global economic environment,” said Scott Davis, UPS’s chairman and CEO. “Thanks to superb execution, our US domestic reorganisation is producing better than expected results. Substantial growth in our international segment continues to outpace the market. It’s clear the strategic direction we’ve set for the company is proving successful.” Based on expectations of continued momentum in every segment, UPS has increased its guidance for 2010 adjusted earnings to a range of $3.35 to $3.45 per diluted share, a 45%-to-50% increase over last year. For the three months ended June 30, 2010, operating margin expanded 320 basis points to 11.5% and consolidated volume totalled 948m packages, a 4% increase. Revenue per piece improved 7%, reflecting higher base rates, fuel surcharge increases and heavier average shipment weight. In the prior-year quarter, UPS took a $48m after-tax charge for the re-measurement of certain foreign currency obligations that did not qualify for hedge accounting treatment. That adjustment reduced second quarter 2009 diluted earnings per share by $0.05. The boys in brown have done well!
There was an air of uncertainty this week in the Channel Islands, as Jersey Post said up to 90 jobs will be axed, as a part of an overall cost-cutting plan to save the business. The company announced the intention to save almost £4.9m by the end of next year. Chief executive Ian Carr said: “The business transformation plan to remove £4.9m of costs over the next 18 months is essential for Jersey Post’s future survival. Jersey Post’s profits collapsed last year as letter mail volumes tumbled. With forecast losses about to be compounded by further competition, Jersey Post will become insolvent within a few years unless it takes radical action now.” Back in the UK, Dave Ward, Communication Workers Union deputy general secretary, said: “This is a very difficult day for staff at Jersey Post. As a union we recognise that there is a need for the company to reduce its costs as it faces unprecedented business threats, including dropping mail volumes, loss of cross subsidy and pressures of regulatory uncertainty.”
Concerning Africa, DHL has announced this week that its Global Forwarding division will be investing further into the region to bolster its established position in Sub-Saharan Africa. The company also confirmed that Sub-Saharan Africa has been integrated into one region with South Asia Pacific under leadership of Amadou Diallo, with the head office in Singapore. Diallo is a member of the DHL Global Forwarding Freight Executive Board and was born in Senegal. DHL said it intends to leverage the expertise built in Singapore in sectors such as Oil and Energy, Life Science, Automotive, Technology and Aid and Relief logistics to strengthen its operations in Africa. Having opened dedicated operations in all important African economies over the last few years, DHL Global Forwarding has committed to further invest and grow its human resources, finance and sales and marketing teams to support further growth in the region. Commenting on the news this week, Hermann Ude, CEO at DHL Global Forwarding, said, “DHL Global Forwarding’s plans in Africa underpin the potential we see in the continent. The triangle of trade between Africa, the Middle East and Asia will shape the future of global trade and our investments in people and processes will ensure businesses have access to world-class logistics operations across Africa”.
And finally…
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