Deutsche Post DHL posts “strongest second quarter in company’s history”
Deutsche Post DHL Group has reported that it increased its operating profit “significantly” in the second quarter (Q2) of 2016. Group EBIT was €752m, up 40.0% on Q2 2015, and consolidated net profit was up 66.0% to €541m. Group revenue fell by 3.5% to €14.2bn, but the company said that this “primarily reflects a change in the recognition of revenue generated from a key customer contract in the Supply Chain division, which started in the fourth quarter of 2015”.
Commenting on the results, Frank Appel, CEO of Deutsche Post DHL Group, said: “Our successful business performance and the strong increase in operating profit we achieved in the second quarter demonstrate that we took the right decisions and made the right investments in 2015, a year of transition, to set the stage for improving our profitability this year and in the years to come.
“Having posted the strongest second quarter in our history, we remain well on track towards achieving our targets.
“Our Post – eCommerce – Parcel (PeP) division in particular contributed to the positive trend. PeP management is continuously expanding the division’s market-leading position through future-oriented investments and trend-setting innovations.”
Looking ahead, Deutsche Post DHL Group re-confirmed its full-year 2016 forecast for Group EBIT to be between €3.4bn and €3.7bn, and also continued to forecast an average increase in operating profit of more than 8% annually during the period from 2013 to 2020.
Focusing on the group’s various divisions, PeP generated an operating profit of €247m, up from €75m in Q2 2015, and revenue increased by 7.8% to €4bn. This positive performance was driving by eCommerce – Parcel business unit which saw revenues increase by 14.2% to €1.7bn. In terms of operating profit, this was PeP’s best Q2 since 2008, but direct comparisons with the prior year period can be misleading because the 2015 results were skewed by the postal strike in Germany.
The company also stated its decision to sell the Postbus business, and its reasons for doing so: “The PeP-division entered the liberalized long-distance bus market in October 2013. Within a short period of time it was able to become the quality leader in the market with its Postbus service. However, the Postbus service has not met the company’s financial expectations sufficiently. Therefore, the company has decided to withdraw from the market and has agreed to a sale of its Postbus business to FlixMobility GmbH.”
The DHL divisions reported a combined increase in EBIT of 10.5% to €591m. Express notched up an EBIT increase of 11.7% to €420m, while Global Forwarding, Freight maintained the positive trend of the preceding quarters with an EBIT increase of nearly 75% to €69m. Operating profit at Supply Chain fell from €119m to €102m, which the group attributed to “restructuring costs”.
Revenue in the Express division rose by 2.0% to €3.52bn – and when adjusted for negative currency effects and lower fuel surcharges, the increase was 7.2%. Deutsche Post DHL said that this performance “was once again driven by solid growth in the international time-definite (TDI) shipments business”, where daily volumes rose by 8.2%.
