Home » 3PL/4PL, Breaking News » Deutsche Post DHL logs slight fall in Q1 revenue, confirms 2018 earnings targets

Mail and logistics giant Deutsche Post DHL Group reported a slight decline in consolidated revenue in the first quarter of 2018, attributable to negative currency effects and the sale of the subsidiary Williams Lea Tag.

Reported revenue for the first quarter was EUR14.7 billion (US$17.5 billion), slightly down from EUR14.9 billion for the same period the prior year.

On an organic basis, Deutsche Post DHL said group revenue rose by a substantial 6.4%. Operating profit (EBIT) rose by 2.3% to EUR905 million, which includes a positive EBIT effect of EUR44 million resulting from the transition to the new IFRS 16 accounting standard, and a positive effect of EUR108 million resulting from pension revaluations.

These positive EBIT effects were offset by negative one-offs of EUR50 million in the supply chain division. The international express business continued to see particularly dynamic growth during the first quarter.

“Overall, we had a good start to the year, although we still have a lot of work ahead of us during the remainder of the year. Global e-commerce continues to boom, meaning that the most important growth driver for our businesses is still intact. We remain confident that we will achieve our ambitious goals for 2018 and beyond,” said group CEO Frank Appel.

“After an overall good first quarter, the company continues to project an increase in operating profit to around EUR 4.15 billion for full-year 2018,” he added.

The improvement includes about EUR150 million expected as a result of the transition to IFRS 16. The Post-eCommerce-Parcel (PeP) division is expected to generate EBIT of around EUR1.5 billion. An EBIT of around EUR3.0 billion is anticipated from the DHL divisions. As announced before, the company plans to increase EBIT to more than EUR5 billion by the 2020.

All in all, Deutsche Post DHL generated consolidated net profit of EUR600 million after non-controlling interests in the first quarter of 2018 compared to the 2017 figure of EUR633 million. The decline results from the transition to IFRS 16, said the company in a statement.

On the performance of the business units of the company, revenue in the Post-eCommerce-Parcel division increased by 1.7% to EUR4.6 billion in the first quarter. The division’s positive performance was primarily attributable to growth in revenue in the eCommerce-Parcel business unit.

In the first quarter, the express division saw revenue rise by 4.9% on the prior year to EUR3.8 billion. “This dynamic performance was once again driven by strong growth in the international time-definite (TDI) delivery business, where daily volumes rose by 9.6% compared with the prior-year period,” said the company.

The division succeeded in growing operating profit by 16.4% to EUR 461 million on the back of strict yield management and continuous improvements in the network.

The global forwarding, freight division continued its turnaround in the first quarter. Revenue increased by 1.3% to EUR3.6 billion.

The division was increasingly able to pass on higher freight market rates to its customers. At the same time, the additional measures introduced to raise profitability are proving effective. The division’s EBIT increased by a considerable 75.0% to EUR70 million, said Deutsche Post DHL.

Revenue in the supply chain division came in at EUR3.1 billion in the first quarter from EUR3.5 billion in the same period last year. In addition to negative currency effects, the revenue decline mainly reflects the sale of UK subsidiary Williams Lea Tag in the fourth quarter of 2017. Operating profit declined to EUR55 million from EUR99 million in the same quarter last year.

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