Deutsche Post World Net yesterday announced a 2.9% increase in its 2006 operating profit to EUR3.87 billion in line with targets but its net income dropped 14.3% to EUR 1.92 billion. Boosted by
confirmation of a higher dividend for 2006, the Deutsche Post share rose by over 3% duringafternoon trading and closed at EUR 25.20.DPWN consolidated revenue grew by 35.8% to EUR 60.5 billion last year, largely due to thefirst full-year consolidation of Exel which it acquired in December 2005. The 2.9% rise in EBIT toEUR 3.87 billion was in line with the forecast communicated to financial markets, the group pointedout.
Consolidated net income declined by 14.3% to EUR 1.92 billion. One reason was that the groupreduced its stake in Postbank to 50% plus one share during the past year, meaning that aproportionately smaller share of net income is attributable to Deutsche Post stockholders. Earningsper share for 2006 fell 19.6% from EUR 1.99 to EUR 1.60.
Nevertheless, Deutsche Post World Net’s board of management proposes to increase the dividendfor 2006 to EUR 0.75 per share from EUR 0.70 in the previous year.
The highly-profitable Mail division slightly increased its EBIT for 2006 to EUR 2.05 billionfrom 2.03 billion euros in 2005 despite competitive and substitution pressures. The Logisticsdivision more than doubled operating profits to EUR 762 million from EUR 346 million in 2005following the successful integration of Exel.
The Express division succeeded in a financial turnaround last year with EBIT of EUR 325million compared to a loss of EUR 23 million in 2005. Excluding costs for the new hub in Leipzig,which were moved forward to 2006, the result would have been higher by a mid-double-digit millioneuro amount, DPWN said.
The Financial Services division (Postbank) also met the guidance level with EBIT of more thanEUR 950 million compared to EUR 863 million in 2005.
Management Board Chairman and Chief Executive Officer Klaus Zumwinkel expressed hissatisfaction with the results. “We are now positioned exceptionally well,” he declared. “With salesexceeding EUR 60 billion, we are the world leader in logistics and are able to reap the benefits ofeconomies of scale. Now, organic growth will be our top priority.”
Chief Financial Officer Edgar Ernst added: “In three of four operative divisions, we exceededour forecasts. We were particularly strong at Postbank and in the logistics sector.”
Ernst also pointed to the performance of the Mail division. “Our strategy of offsettingdecreased mail revenues in the home market of Germany with increased international activities whilecutting costs is working exactly as planned,” he commented. DPWN now generates more than one-fifthof its mail revenues outside Germany.
DPWN will release its full results for 2006 at the annual earnings press conference on March20, 2007.
