Deutsche Post DHL Q2 results: revenues up, but profits down
Deutsche Post DHL Group has reported that its consolidated net profit for the second quarter (Q2) of 2015 declined by 29.3% to €326m, although revenue increased by 7.3% to €14.7bn. The company said the drop in profits should be view “against the backdrop of the negative impact of the strike in the Post – ecommerce – Parcel (PeP) division.
As previously reported, the industrial dispute – which focused on the status of the company’s parcel delivery agents – was resolved following an agreement between Deutsche Post DHL and the union ver.di on 5 July. In its Q2 results statement issued today (6 August), Deutsche Post DHL described the deal as a “sustainable wage agreement that lays the foundations for long-term growth in the German parcel business”.
Operating earnings at the PeP division contracted by 60.3% to €75m. The company said that this development “principally reflects an impact of €100m from strike activities during the wage negotiations, in addition to further investments in the expansion of the international E-Commerce business”.
Deutsche Post DHL added that PeP Q2 revenues grew by 1.9% to €3.7bn.
As expected, this overall revenue figure breaks down into growth in parcels and e-commerce, and a continuing decline in traditional post.
Q2 revenues from the eCommerce – Parcel units were up 12.2% to €1.5bn. The increase was based on revenue gains of 26.3% in eCommerce, 9.3% in Parcel Germany and 8.6% in Parcel Europe.
The company statement said: “This positive development confirms that Deutsche Post DHL Group continues to profit from its strong market position in the dynamically growing e-commerce segment. Through investments in infrastructure and new, innovative offerings, such as Parcel Boxes, the Group is continually strengthening this successful position.”
In contrast, Q2 revenues in the Post unit fell by 3.8% to €2.3bn.
“This development reflects further volume declines in the Mail Communication and Dialog Marketing segments, a trend that was exacerbated by strike activities in recent months,” noted Deutsche Post DHL. “Price increases for postal products in Germany were able to partially offset these effects.”
The Express division “continued its outstanding revenue and earnings development” in Q2, achieving a record high operating margin of 10.9%.
The Supply Chain division, supported by positive one-time effects, was able to accelerate its planned optimization programme and delivered an EBIT increase of 9.2% to EUR €119m.
Developments were less positive in the Global, Forwarding, Freight division, however, and Deutsche Post DHL announced that, “as a result of the unsatisfactory earnings”, the management team “has initiated a comprehensive turnaround program with restructuring measures”.
Frank Appel, CEO, Deutsche Post DHL Group, commented: “After the successful execution of Strategy 2015, the current year represents a year of transition. In the second quarter we worked very hard and took important steps towards the successful implementation of our Strategy 2020. With that, we want to ensure the long-term, profitable growth of the Group. To achieve this, we have recorded some short-term impact on our results.”
