Indian express operator Blue Dart has unveiled a surge in profits for Q1, 2011, amid reportsthat 81% majority owner DHL Express could take full control of the company.
Blue Dart, the domestic express market leader, increased revenues by 30.5% to Rs 3,370 million(€51.9 million) for the quarter ended March 31, 2011. Its operating profit (before other income andexceptional items) rose 35.3% to Rs 479 million (€7.4 million) and the company posted a Rs 361million (€5.6 million) net profit for the first quarter, an increase of 51%.
Anil Khanna, Managing Director, Blue Dart Express Ltd stated: “Since inception, customercentricity has been of paramount importance to Blue Dart. We constantly innovate; strengthen ourproduct portfolio to serve our customers with solutions that match up to meet their dynamic andevolving business needs. We will continue to focus on delivering world-class service quality,experience and maintain our reliability quotient”.
He further added: “Blue Dart continues to be viewed as a premium brand with high customersatisfaction. Our plan to support the Indian growth story is on track. This is also validatedthrough the dominant market share and customer loyalty in Blue Dart Country. Our focus in the next3-5 years will be to further build on this trust and remain customer’s First Choice.”
Meanwhile, India media have reported that DHL Express, which holds 81% of Blue Dart’s shares, isplanning to buy up the remaining 19% from minority owners in order to gain full ownership. Thiswould enable it to de-list the company from the Bombay Stock Exchange. Blue Dart shares have soaredin recent weeks on speculation that DHL could be preparing an offer for the minority shares. Thestock closed today at Rs 1,492.55, up 8.7% to a new all-time high after above-average trading.
The financial newspaper Economic Times reported yesterday that DHL has approached minority ownerRadhakishan Damani, who is the largest minority shareholder with a 5.5% stake. Damani apparentlywants a price of Rs 2,250 – 2,300 for his shares while DHL is reportedly ready to pay Rs 1,700 –1,800 per share. Most of the minority shareholders are financial institutions.
A DHL spokesperson told CEP-Research: “DHL does not comment on market speculation andrumours.”
In 2002, DHL Express and Blue Dart Express signed a sales alliance. Two years later DHL Expressacquired a 68.21% stake in the company, which it later raised to 81.03%.
Then in 2006, DHL announced plans to spend about €41 million buying out the minorityshareholders, taking its overall investment in the company to some €168 million. It offered Rs 550per share to buy out the minority owners and de-list Blue Dart. But it dropped the plans afterlearning it would be forced to pay Rs 950 per share, 72% more than its offer price, under a reversebook-building process used to determine the sale price.
