Deutsche Post DHL today unveiled Q1, 2012, operating profits up nearly 10 per cent, beating analystexpectations, thanks to strong growth in Asia and e-commerce and confirmed its full-year profits
guidance.The German mail and logistics group improved EBIT by 9.9 per cent to €691 million on revenuesup 4.3 per cent at €13.4 billion while net profits soared 64 per cent to €533 million. Theseresults were ahead of analyst forecasts, according to the Reuters and Bloomberg news agencies.
The three DHL divisions (Express, Global Forwarding/Freight, Supply Chain) improved theircombined EBIT by 12.7 per cent to €409 million while Mail increased profits by 5.4 per cent to €393million. The key growth drivers were the express and supply chain businesses in Asia and the Germanparcels business.
“Given the somewhat subdued global economic environment, our successful start into the yearis clear evidence for us continuing to build on our strengths,” stated CEO Frank Appel. “Theefficiency improvements we have achieved in recent years and our unmatched position in the world’sgrowth markets have prepared us well for continuing on our profitable growth path. Building on thisbase, we will systematically keep on implementing Strategy 2015 in order to unlock the group’s fullpotential.”
DHL Express increased revenues by 9.8 per cent to just over €3 billion in the first quarterthanks to strong growth around the world and improved operating profits by 7.9 per cent to €231million. Operating costs rose due to expansion of the air network, and the return on sales droppedback slightly to 7.6 per cent from 7.8 per cent one year earlier, the company’s Q1 report showed.
Its time-definite international (TDI) volumes increased by 9.6 per cent on a daily averagebasis while time-definite domestic volumes rose 5.9 per cent, but day-definite domestic volumesdeclined nearly 22 per cent due to the selloff of parcels businesses in several countries.
Asia Pacific remained the main growth driver with revenues rising by 16.9 per cent to €983million and daily TDI volumes up 9.5 per cent. European revenues grew solidly by 6.4 per cent to€1.38 billion with daily TDI volumes up 8.7 per cent. The Middle East/Africa region also grew welldespite the political unrest in the region, with revenues up 13.8 per cent to €231 million.
Revenues in the Americas rose by 13.2 per cent to €513 million and daily TDI volumesincreased 12.7 per cent, powered by a “continuing good performance” in the United States. Thecompany announced it will invest nearly $50 million over the next 12 months to significantly expandthe US air hub in Cincinnati to increase capacity in response to rising demand.
The Mail division improved profits by 5.4 per cent to €393 million in the first three monthsof 2012 while revenues grew by 1.1 per cent to €3.56 billion, leaving the operating margin upslightly at 11 per cent. The letters business saw revenues drop 1.1 per cent to €1.37 billion andvolumes dropped by the same figure as some customers switched to competitors.
DHL Parcel Germany, however, grew strongly and increased revenues by 12.7 per cent to €844million, driven by the flourishing e-commerce business. Volumes increased by 13.6 per cent to 234million parcels, with business customer volumes up 15.1 per cent and consumer parcels 3.7 per centhigher.
In contrast, DHL Global Mail revenues declined by 2.1 per cent to €417 million, mostly due tothe disposals of UK and Dutch domestic businesses which caused a 54 per cent volume decline butinternational export mail from Asia and the USA grew.
The Global Forwarding/Freight division increased revenues by 2.4 per cent to €3.7 billion andimproved its operating profits by 22.5 per cent to €87 million thanks to better purchasingconditions, increased efficiency and a selective market strategy. European overland transportgrowth outweighed lower air and ocean freight revenues caused by lower volumes and ratesrespectively.
DHL Supply Chain increased revenues by 6 per cent to €3.4 billion and improved EBIT by 16.7per cent to €91 million. The improvement was generated in particular by strong growth in theAsia-Pacific region and in the ‘Life Sciences & Healthcare’ and ‘Automotive’ sectors, while newcontracts worth €190 million in total were signed with new and existing customers.
Looking ahead, DP DHL confirmed its full-year guidance for 2012, with EBIT expected between€2.5 billion and €2.6 billion. The Mail division is forecast to earn between €1 billion and €1.1billion, while the DHL divisions are expected to earn about €1.9 billion. The company said itexpects the world economy will produce moderate growth this year despite continuing economicuncertainties, and that the company, driven by the DHL divisions, will generate continued gains inrevenues and earnings versus the prior year.
Over the next few years, DP DHL expects the DHL divisions to continue producing annualearnings growth that will average between 13 per cent and 15 per cent between 2010 and 2015 whileit aims to maintain stable profits in the Mail division.
