Deutsche Post say Euro switch contributed to profit drop
Postal service Deutsche Post said Tuesday that first-quarter profits fell 23 percent, partly because people used up old stamps denominated in marks rather than buying new euro versions.
Net profit fell to 417 million euros (dlrs 375 million) from 539 million euros in the same quarter the year before, the company said. Sales at its biggest division _ its legal monopoly on carrying the mail _ fell 2.1 percent in the period, to 2.63 billion euros (dlrs 2.36 billion) from 2.75 billion the year before.
“One reason behind this was the conversion to the euro, which led to the increased use of Deutsche-mark denominated stamps acquired in the past,” the company said in a statement. Old stamps are good until June 30, unlike the old national currencies, which went out of circulation after a two-month transition that ended Feb. 28.
While the euro played a role, the main theme in the company’s earnings statement was the slower economy.
Chief executive Klaus Zumwinkel said a recovery in profits depends “on how quickly the economy recovers in Europe, Asia and the United States.”
The company’s express mail division showed sharply lower operating profits, due to the inclusion of loss-making subsidiary DHL International. Earnings before financial items such as taxes and interest dropped to 33 million euros (dlrs 30 million) from 88 million the year before.
Deutsche Post completed raising its stake in the Belgium-based company to 51 percent during the quarter.
The German government sold 29 percent of Deutsche Post in 2000 but has put off selling a majority stake. The company’s shares traded up 0.47 percent on the Frankfurt exchange at 15.06 euros (dlrs 13.55) Monday.
