Deutsche Post World Net (DPWN) has announced it will write down the value of DHL Express Americasby EUR 600 million in its 2007 results due to the loss-making US business but the group’s
underlying full-year profits will reach the guidance level of EUR 3.7 billion.In a statement, DPWN said that its 2007 results were in line with its expectations andguidance for EBIT of around EUR 3.7 billion before non-recurring effects. All divisions had mettheir targets with a sound finish to the year. “Overall, we saw good progress on an operating levelin our business last year, with full-year underlying EBIT of EUR 3.7 billion. In 2008, we will makefurther good progress, targeting around EUR 4.2 billion EBIT,” said Chief Executive Officer KlausZumwinkel.
Following an impairment review, however, DPWN had decided to make a non-cash writedown on DHLExpress Americas fixed assets of around EUR 600 million in the 2007 accounts. This will cover thevalue of assets such as aircraft and road vehicles in the USA, which makes up the bulk of theAmericas unit.
DPWN added that it is continuing to identify the “optimal solution” to improve theperformance of the US express business.
Influential analysts recently called on DPWN to downscale its US express operationssignificantly to reduce long-running heavy losses. Last November, due to the increasing impact ofthe slowing US economy, DPWN scrapped the target of achieving a breakeven in the USA by 2009.
But Chief Financial Officer John Allan stressed in the statement: “The U.S. Express businessis a key management priority and we are looking at a variety of options to improve performance. Indoing so, we are committed to maintaining a significant presence in the U.S. market, which remainsof strategic importance to the Group.”
DPWN noted that it still expects the Express division to make consistent progress inunderlying profit and to reach an EBIT of between EUR 900 million and EUR 1.1 billion in 2009. Thefull 2007 results will be announced on March 6, 2008.
