DHL Express improved its financial results significantly in the third quarter of 2006 mostly thanksto lower losses in the USA, according to figures released today by parent group Deutsche Post World
Net. But the forecast for its full-year operating profit has been revised downwards due to highercosts in Europe.The DPWN Express division achieved a Q3 operating profit (EBIT) of EUR 86 million on revenuesof EUR 3,755 million (down 2.8%). This was an operating margin of 2.3%. In comparison, it had anoperating loss of EUR 20 million on revenues of EUR 3,863 million in the third quarter of 2005. Theoperating profit in the seasonally weak third quarter was EUR 44 million higher than in the secondquarter, DPWN noted in its Q3 report.
Over the first nine months, DHL Express made an operating profit of EUR 91 million onrevenues of EUR 12,964 million (+2.4%). This was an operating margin of just 0.7%. The nine-monthoperating profit was down 58.1% from the EUR 217 million one year earlier. All 2005 figures wererevised to reflect the transfer of DHL Freight to the Logistics division.
In Europe, its major region, DHL Express suffered a 3.1% drop in revenue of EUR 1,950 millionin the third quarter, leave nine-month revenues up slightly by 0.6% to EUR 7,766 million. Europerevenues were impacted by the disposals in the previous year, including Fuelserv in the UnitedKingdom and the Scandinavian Fulco group. In Germany, DHL increased its international expressrevenues but had to cut prices for domestic parcels due to strong competitive pressure.International express revenues also rose in other European countries.
In the Americas, Q3 revenue was down 0.9% to EUR 1,103 million, and nine-month revenue fell0.7% to EUR 3,280 million. DPWN said that the Americas region was able to continue its positivedevelopment from the second quarter into the seasonally weak third quarter. After havingsignificantly improved service quality in the United States, the company is increasingly able toacquire new business at better rates.
In Asia Pacific, DHL Express increased Q3 revenues by 9.3% to EUR 621 million, and nine-monthrevenues were up 15.6% to EUR 1,796 million. Strong operating growth in China continued. TheEmerging Markets unit increased Q3 revenues by 12.5% to EUR 234 million, and grew nine-monthrevenues by 14.8% to EUR 700 million. Business in Russia and in the Middle East developedparticularly positively, DPWN noted.
The full-year forecast for DHL Express operating profit was revised downwards from the EUR450 million stated at the announcement of the half-year figures in August to a level of EUR 300million and EUR 400 million. This was explained by the one-off costs for network optimization inEurope, which the new management is currently investigating.
