Deutsche Post Fears $2.2Bln Loss in EU

Deutsche Post said Friday that it may lose 2 billion euros ($2.2 billion) of sales in its domestic mail business once full European liberalization came into force, but said it would be offset by expansion into other markets.

Hans-Dieter Petram, head of the Deutsche Post World Net’s mail division, said there could be a drop of 20 percent in the unit’s revenues once other companies were allowed to compete freely for postal services in Germany in the next several years.

“I believe it can be maximum — at the end of the decade — round about 20 percent,” he said at an analysts’ conference in Bonn, adding that this is a “worst case scenario.”

But he said the simultaneous opening up of other European markets where Post could do mail business would more than make up for the blow the group would take at home.

“I believe it will be very hard for others — including the Netherlands — to have a large market share in Germany,” he said. Netherlands-based TNT is Deutsche Post’s chief rival.

The company called liberalization more of an opportunity than a risk.

Separately, Petram said the group’s mail business did not need to make major investments in the next five to ten years. Post CFO Edgar Ernst said the division’s annual capital expenditure would remain stable at 300 million euros.

The officials also said Deutsche Post was well prepared for competition and did not expect further cuts in stamp prices after a regulator-forced drop at the beginning of this year.