Express, logistics fail to stop profit fall at Deutsche Post
Deutsche Post World Net, the German postal services-to-logistics conglomerate, reported a 5 percent drop in operating profit (earnings before interest, tax and amortization) for the first nine months of the year, to 2 billion euros ($2.3 billion), despite stellar performances from its express and logistics divisions.
The financial and mail divisions both suffered in the January-September period, with the financial arm of the group posting a 20 percent drop in operating profit, to 361 million euros ($415 million) and the hugely profitable mail business seeing its operating result decrease by 7 percent, to 1.5 billion euros ($1.7 billion).
By contrast, the express division increased its operating profit by 63 percent in the nine-month period, to 183 million euros ($210 million), as its revenue rose by 4 percent, to 11.5 billion euros ($13.2 billion). The logistics division of Deutsche Post, which includes DHL Danzas Air and Ocean, reported a 16-percent higher operating profit of 135 million euros ($155 million), and a 4-percent higher revenue of 4.3 billion euros ($4.9 billion).
Overall group revenue was virtually flat over the same period, at 28.9 billion euros ($33.2 billion).
“At 28.9 billion euros, revenue was slightly up on the previous year's level (+0.3 per cent) despite negative exchange rate effects,” Deutsche Post said.
The group’s consolidated net profit improved substantially, rising to 869 million euros ($999 million) in the latest nine-month period, from 392 million euros a year ago. The increased net profit is explained partly by the fact that last year’s exceptional charges due to the repayment of subsidies demanded by the European Commission did not reoccur this year.
“The progress made in integrating the group and the cost savings have exceeded our expectations,” said Klaus Zumwinkel, chairman of Deutsche Post.
Although operating profit was down in the first nine months of the year, profit from operating activities increased slightly during the third quarter, to 570 million euros ($655 million), from 568 million euros in the corresponding quarter of 2002. In the third quarter, net profit decreased by 8 percent, to 219 million euros ($252 million), while group revenue increased by 3 percent, to 9.7 billion euros ($11.1 billion).
Deutsche Post expects to record a profit from operating activities of “at least 3.6 billion euros” ($4.1 billion) in 2005.