Tag: Deutsche Post

Deutsche Post’s monopoly on letter delivery will end next year. Even as the company struggles to remain profitable, most other European Union countries are reluctant to liberalize their mail markets.

Deutsche Post stocks fell 6 percent Tuesday after the company announced its 2007 earnings will fall short of predictions.

Europe’s largest mail service provider has tried to diversify and take a more international approach in recent years.

At the same time, many other EU countries have dragged their feet on liberalizing their own mail monopolies. Deutsche Post said it’s worried this attitude will put them at a disadvantage.

Domestic postal services in EU countries are scheduled to be completely opened to competition by 2009. The bloc also wants to open the market for letters under 50 grams (1.8 ounces) to private carriers and thereby get rid of state postal monopolies.

Deutsche Post CEO Klaus Zumwinkel has used profits from the traditional mail service to transform the company into a major player in the global transport and logistics market.

Still, delivering letters remains a vital part of the Deutsche Post. Even with the company’s big push in recent years into international logistics, freight and express mail, normal mail delivery remains responsible for 25 percent of the company’s gross income, and more than 60 percent of its profit.

Deutsche Post AG’s fourth-quarter net profit fell by around a quarter, the German mail and logistics company said Tuesday, hurt by a cut in its stake in the country’s biggest retail bank, Deutsche Postbank AG,

Bonn-based Deutsche Post, the parent of express shipper DHL, said it earned EUR643 million (USD856 million) in the October-December period a 26.6 percent drop from EUR876 million a year earlier.

That performance was well below the EUR 773 million (USD1.03 billion) forecast of analysts surveyed by Dow Jones Newswires. Fourth-quarter sales, however, increased by 35.4 percent, rising to EUR16.4 billion (USD21.8 billion) from EUR12.1 billion.

Quarterly earnings below interest and taxes fell by 5.4 percent to EUR1.28 billion (USD1.7 billion) from EUR1.36 billion a better showing than the EUR1.26 billion (USD1.68 billion) analysts expected.

Last year, Deutsche Post reduced its holding in Postbank to just over 50 percent, cutting the amount of income it receives from the business. It already has said that full-year net profit fell by 14 percent, dropping to EUR1.92 billion (USD2.55 billion) from EUR2.24 billion.

Deutsche Post said it expects full-year EBIT in 2007 to reach EUR3.6 billion (USD4.8 billion), compared with last year’s EUR3.9 billion a figure that included EUR400 million in one-time gains. It forecast a “slight increase” in sales.

The company said that the integration of British-based logistics group Exel PLC and other acquisitions had gone well.

Deutsche Post AG said it expects full-year EBIT of ‘at least’ 3.6 bln eur, down from the 3.9 bln eur reported in 2006, as it does not expect to repeat one-time gains comparable to last year’s sale of 276 mln eur shares in Deutsche Postbank AG.

The German mail carrier said the target represents an increase of 3 pct from last year’s result excluding one-off gains, adding it sees a ‘positive business development’ ahead.

Deutsche Post also said it expects its Express division to achieve full-year EBIT of at least 400 mln eur.

The unit is set to complete its restructuring programme by 2009, with analysts saying it may be finalised ahead of schedule.

Its Mail division’s EBIT is expected to remain flat at 2 bln eur, as the company expects international business units to offset losses in its domestic German market caused by increased competition.

The company also said it wants to raise EBIT at its Logistics unit by 15 pct from last year’s 762 mln eur and sees ‘high single-digit percentage growth’ in revenue.

Deutsche Post’s Financial Services division will also grow, with the group anticipating a rise in revenue, driven by ‘the steady increase in contributions from BHW’.

The division will achieve EBIT of about 100 mln eur, an increase of at least 5 pct.