DPDHL Group reports strong Q1 performance
Deutsche Post DHL Group has reported that its operating profit increased significantly in the first quarter (Q1) of 2016 and CEO Frank Appel said that the “good start to the year” puts the company “firmly on track” to achieve its targets for 2016. Group EBIT was €873m, up 21.3% on Q1 2015, although group revenue dropped by 6.1% to €13.9bn. In a statement issued today (11 May), DPDHL Group said that the decline “primarily reflects the changed recognition of revenue generated from a key customer contract in the Supply Chain division starting in the fourth quarter of 2015” – and added: “The main growth drivers – above all the international express business and the dynamic parcel and eCommerce business – remained intact in the first months of the new year.”
Commenting on results, Frank Appel, CEO of Deutsche Post DHL Group, said: “We’ve had a good start to the current year. With an EBIT of €873m we have registered the strongest first quarter in our company history. The efforts we made in 2015 to position ourselves for profitable growth in all divisions are paying off. Last year was a year of transition, and we are now firmly on track to achieve our targets for 2016.” stated
Focusing on the group’s key sectors, DPDHL Group said that Q1 revenue in the Post – eCommerce – Parcel division increased by 2.4% to €4.2bn . Of this, €1.7bn came from the eCommerce – Parcel business unit, which registered an 8.6% growth.
Revenue in the Post business unit fell by 1.2% to €2.53bn. DPDHL Group added: “The January 1 increase in letter postage prices almost fully offset the structural decline in volumes within the Mail Communication and Dialogue Marketing segments as well as the working day-effect.”
Operating profit in the PeP division was up 3.3% at €412m, as the continued strong growth in the parcel business as well as the letter price increase more than offset the volume decline at Post and the investments the Group has made to expand the eCommerce – Parcel business.
Revenue for the Express division was up 0.3% at €3.25bn – but DPDHL Group said that when adjusted for negative currency effects and lower fuel surcharges, there was actually an increase of 6.1%. The time-definite international (TDI) business was driving the division’s growth. EBIT for the Express division was up 7.5% at €357m.
Revenue in the Global Forwarding, Freight division fell by 12.2% to €3.3bn. “Apart from the weak market environment,” said DPDHL Group, “the main reason for the revenue decline was the division’s more selective market strategy.” Despite revenue drop, the division’s operating profit actually increased significantly, from €17m to €51m.
In the Supply Chain division, revenue fell by 13.9% to €3.4bn. although the EBIT was up from €53m to €127m.
The Q1 results was well received by market observers. Connor Campbell, a senior market analyst at www.spreadex.com, commented: “DHL-owner Deutsche Post signed, sealed and delivered a solid first quarter report this Wednesday, investors so pleased with the package that they sent the stock nearly 2% higher as Wednesday went on. A 21% rise to €873 million in earnings before interest and tax was the highlight, besting analysts’ estimates by around €30 million, despite the company’s letter volume dropping 5.8% and revenue dropping by over 6%.”
