Deutsche Post DHL generated further growth in the second quarter of 2020 despite the impact of COVID-19.
Group revenue increased by 3.1% to EUR16.0 billion (US$18.9 billion) year-on-year, while adjusted organic revenue growth was even higher at 4.6%. This was mainly driven by strong growth in e-commerce.
Operating profit (EBIT) grew by 18.6% to EUR912 million in the second quarter. Adjusted EBITDA climbed by EUR229 million to EUR1.1 billion.
Overall, the group generated consolidated net profit after non-controlling interests of EUR525 million in the second quarter of 2020 from EUR458 million in the same quarter of last year.
“With these results, the group slightly surpassed the preliminary quarterly figures it released in July,” the company said in a statement.
The good performance in the second quarter was due to the group’s broad portfolio of logistics services and its global presence, it added.
With the positive results, DHL issued new earnings guidance in July for the current financial year: The group expects its operating profit to reach between EUR3.5 billion and EUR3.8 billion in 2020.
The company’s mid-term earnings guidance as given in July remains unchanged. In this guidance, the group expects EBIT of around EUR4.7 billion to more than EUR5.3 billion for 2022—depending on the shape of the general economic recovery.
All five divisions generated an operating profit in spite of the challenging conditions resulting from the pandemic, said DHL.
Revenue in the Post & Parcel Germany division rose by 7.0% year-on-year, to nearly EUR3.9 billion. Operating profit rose by 49.2% to EUR264 million. The improvement was due to the cost and pricing measures taken in both the mail and parcel businesses.
The Express division was able to increase its second-quarter revenue by 6.5% year-on-year to about EUR4.5 billion. Its operating profit climbed to EUR565 million (2019: EUR521 million). At the beginning of the second quarter, the division’s performance was impacted by a sharp drop in volumes. But as the quarter advanced, volumes recovered, particularly in Asia, and ultimately reached in total the level of the same period last year.
The Global Forwarding, Freight division reported revenues of EUR4.2 billion, up 9.7% year-on-year. Operating profit climbed by more than 50% year-on-year to EUR190 million (2019: EUR124 million). The division faced a severe shortage of available air freight capacity resulting from the pandemic. Amid declining volume, however, this shortage of capacity led to a strong development of the gross margin in air freight.
The Supply Chain division experienced a drop in revenue to about EUR2.7 billion in the second quarter (2019: EUR3.3 billion). It was, however, able to report an operating profit of EUR35 million (2019: EUR87 million). In addition to the pandemic-related revenue decrease, EBIT was negatively impacted by non-recurring effects of EUR62 million.
The eCommerce Solutions division reported a 16.8% increase in revenues, totalling EUR1.2 billion in the second quarter. Operating profit improved to EUR1 million despite non-recurring impairments of EUR30 million from a negative growth of EUR18 million in the same quarter last year.
Photo courtesy of DHL
