DHL posts solid growth in Q2 but air freight volumes decline 5.8%

posted on 6th August 2019 by Justin Burns
DHL posts solid growth in Q2 but air freight volumes decline 5.8%

Deutsche Post DHL Group has continued its profitable growth trajectory in the second quarter as operating profit (EBIT) was up 2.9 per cent to €769 million on the back of revenue rising three per cent to €15.5 billion.

The German logistics giant said all five divisions contributed to this positive development, as did growth in all regions of the world with earnings of the Post & Parcel Germany division (P&P) turned positive again for the first time since the fourth quarter 2017.

However, EBIT growth of the Group was held back by restructuring expenses in the Supply Chain and eCommerce Solutions divisions.

Despite the improvement in operating profit, consolidated net profit declined. In the period from April to June, net profit after non-controlling interests was €458 million (2018: €516 million).

DHL Global Forwarding saw its air freight volumes decline in the second quarter of the year, but its air gross profit was on the rise. Air freight revenues fell 2.4 per cent to €1.2 billion, while volumes dropped by 5.8 per cent on last year to 502,000 tonnes and gross profit was up 4.8 per cent to €238 million.

DHL said growth in the global air freight market lost momentum in the period from April to June but thanks to higher gross profit margins in air freight and ongoing measures to improve cost efficiencies, the division significantly increased operating profit in the second quarter. EBIT improved by 18.1 per cent to €124 million.

The Express division developed positively again in the second quarter. Despite the decision to forgo especially heavy deliveries in the future, the division improved revenue to €4.2 billion (2018: €4 billion). The continued expansion of volumes, coupled with strict yield management, led to an increase in the division’s operating profit to €521 million in the second quarter (2018: €517 million).

“Overall, Deutsche Post DHL Group is in good shape. Our business developed as planned in the second quarter,” says Frank Appel, CEO of Deutsche Post DHL Group.

“We have already generated Group EBIT of about €1.9 billion after six months. That’s nearly half of our minimum target for 2019. The measures we initiated to improve productivity at P&P and the postage rate increase as of 1 July will provide further momentum in the second half of the year, as will the traditionally strong final quarter.

“We are therefore confident about our further performance and have raised the lower end of our full-year forecast – despite the challenging macroeconomic environment.”

For the current financial year, Deutsche Post DHL Group now expects to increase operating profit to between €4-4.3 billion (previously €3.9-4.3 billion).