Germany’s package delivery giant Deutsche Post DHL continued to record strong growth as revenues climbed by more than 4% in the third quarter to EUR14 billion (US$17.45 billion), up from the previous year’s level of EUR13.5 billion on revenue gains from its four divisions.
Group operating earnings climbed by nearly 5% during the third quarter to EUR 677 million from the year-ago figure of EUR646 million. As a result of lower tax expenses and finance costs, consolidated net profit rose even higher, posting more than 17 percent growth to EUR468 million versus EUR399 million year-on-year.
“We continue to profit from our unique competitive position in emerging markets and our role as an eCommerce enabler. For this reason, we remain on track in spite of the current challenging environment,” said Frank Appel, CEO of Deutsche Post DHL.
“Thanks to our continuous investments in the expansion of our network and infrastructure as well as our increased effort to optimize operational processes, we will be able to even more systematically address the needs of our customers and offer our services even more efficiently in the future. We are investing in the group’s sustainable growth for the years to come and, by taking these steps, we are today setting the course for the success of our Strategy 2020.”
In the Post-eCommerce-Parcel (PeP) division, increased postal rates and revenue growth in the parcel business raised the division’s EBIT (earnings before interest and taxes) to EUR288 million against EUR277 million in the same quarter of the previous year.
At DHL, double-digit earnings gains at the express and supply chain units fueled the rise in EBIT to EUR487 million compared to 2013’s EUR472 million.
Profit from January to September
In the first nine months of the current year, group revenues totaled EUR41.3 billion, reflecting an increase of 2%, or more than EUR800 million, above the previous year’s level of EUR40.5 billion. Group operating earnings increased by 4.2% to EUR2.1 billion compared with the previous year’s level of EUR2 billion. Consolidated net profit rose by 8.5% between January and September, climbing from EUR1.3 billion in 2013 to EUR1.4 billion in the current year.
For the full-year 2014, the group continues to anticipate only slight improvement in the global economic environment, but this does not dampen the group’s expectations. It forecasts EBIT to climb to between EUR2.9 billion and EUR3.1 billion in 2014.
While the Post-eCommerce-Parcel division is forecast to contribute around EUR1.3 billion to this total, the DHL divisions are projected to increase operating earnings as planned to between EUR2 billion and EUR2.2 billion.
Outlook beyond 2014
Deutsche Post DHL also believes that the growth in earnings will continue beyond the current year. For 2015, the company expects a significant EBIT increase in spite of the previously announced investments in new IT and process infrastructure. Once the costs for these projects and structural measures are realized, the anticipated operating improvements should produce stronger and sustainable earnings growth in 2016 and beyond, the company stated.
For financial year 2016, it continues to expect an increase in consolidated EBIT to between EUR3.4 billion and EUR3.7 billion. While the DHL divisions should contribute between EUR2.45 billion and EUR2.75 billion, the PeP division is expected to generate operating earnings of more than EUR1.3 billion in 2016.
In the period between 2013 and 2020, the company is striving to boost earnings by an average of more than 8% annually. Of this total, the DHL divisions are expected to contribute an average EBIT growth of about 10% per year. At the same time, the PeP division is projected to increase operating earnings by an annual average of around 3%.
