DEUTSCHE POST SCORES RECORD EARNINGS IN 2000

DEUTSCHE POST SCORES RECORD EARNINGS IN 2000

   Deutsche Post World Net, the aggressively expansive German company, has set new records for profits and revenue in 2000, with net earnings rising 48 percent to euro 1.53 billion ($1.4 billion).

   Revenue rose 46 percent to euro 32.7 billion ($29.2 billion), while profit from operating activities jumped 158 percent to euro 2.38 billion.($2.1 billion).

   “These record levels as well as the increase in foreign revenue from 2 percent in 1998 to 29 percent last year show that we are on track to become the number one global player in the logistics industry,” said Klaus Zumwinkel, chairman of Deutsche Post.

   Zumwinkel said the increase in revenue was mainly due to recent acquisitions. Deutsche Post has assembled a 30-billion-euro network of parcel, logistics and finance businesses in about three years, including Swiss forwarder Danzas AG, American forwarder Air Express International and two German banks.

   Profits in the mail corporate division practically doubled, to euro 2 billion ($1.8 billion) from euro 1.01 billion in 1999. Revenue rose slightly to euro 11.7 billion ($10.4 billion).

   In the express segment, profit rose 27 percent to euro 76 million ($67.8 million), on revenue of euro 6.02 billion ($5.4 billion), up 26 percent.

   Danzas AG, the Swiss forwarder acquired by the group, has been fully integrated into the logistics segment, which contributed euro 113 million ($100.9 million) in profit, on revenue of euro 8.3 billion ($7.4 billion), up 86 percent.

   The financial services corporate division saw profit soar 771 percent to euro 505 million ($450.8 million) on revenue of euro 8 billion ($7.1 billion), up about 178 percent.

   While mail has been the heart of Deutsche Post's business, it's role in earnings has softened as DP's expansion bent has increased its express, logistics and financial services divisions. Despite strong growth in earnings last year, the mail division has gone from accounting for half of the company's revenue and 90 percent of its profit in 1999 to about one-third of earnings and 74 percent of profit in 2000.

   The European Commission on Tuesday fined Deutsche Post AG 24 million euro ($21.6 million), finding that the German postal carrier 'abused its dominant position' by granting rebates, in addition to engaging in predatory pricing for its parcel services.

   As a result of the EC ruling, Deutsche Post, which holds a monopoly over German postal service, will create a separate entity for business parcel services. The new entity can procure services from Deutsche Post, competitors or provide the services itself. However, Deutsche Post services and goods provided to the new entity must be at market price. Also, Deutsche Post must provide those same prices and conditions to the new entity's competitors.

   The commission began investigating Deutsche Post following a complaint by United Parcel Service in 1994, in which the Atlanta-based integrated carrier accused Deutsche Post of using revenues from its profitable letter-mail monopoly to finance offering below-cost business parcel services.