DHL posts revenue and earnings rise in Q1, but air forwarding volumes fall

posted on 13th May 2019 by Justin Burns
DHL posts revenue and earnings rise in Q1, but air forwarding volumes fall

Deutsche Post DHL Group grew its overall revenue by 4.1 per cent to €15.4 billion and operating profit by 28.1 per cent to €1.2 billion in the first quarter (Q1) of this year.

The German logistics giant said the earnings contributions from the DHL divisions were “again encouraging” – while the surge in earnings was driven by non-recurring income from completing the supply chain partnership with S.F. Holding in China initiated at the end of 2018.

In Q1, Deutsche Post DHL Group generated a consolidated net profit of €746 million after non-controlling interests.

In Q1, the Global Forwarding, Freight division sustained the previous quarter’s upward trend in a weaker market environment. Revenue rose by 4.8 per cent year-on-year to €3.8 billion but air freight volumes fell for a fifth quarter in a row by 4.2 per cent to 495,000 tonnes .

The division continued to pursue its selective approach of concentrating primarily on high-margin business. Operating profit increased by 42.9 per cent to €100 million.

Air revenues increased by 3.4 per cent on a year earlier to €1.2 billion and gross profits improved by 4.2 per cent to €224 million.

DHL said the division is on the way to closing the profitability gap to its leading competitors in the medium-term.

Revenue at DHL Express increased by 5.3 per cent to €4 billion in Q1 and operating profit declined slightly to €453 million (2018: €461 million) owing among other things to negative currency effects.

DHL said in addition, earnings were negatively impacted by the decision made in the second half of 2018 to gradually reduce volumes of particularly heavy shipments.

“The first quarter played out as we expected. We achieved growth in all five divisions,” said Deutsche Post DHL Group chief executive officer, Frank Appel.

“This shows that we are very well positioned in attractive markets and that our fundamental growth drivers are intact. E-commerce continues to boom all over the world and although some momentum has been lost, global trade is still on the rise, just as we expected for 2019.

“We are therefore on track towards our target of generating more than €5 billion in EBIT in the coming year.”