Deutsche Post DHL Group’s operating profit surged by 7.2 per cent to €3.74 billion in the 2017 financial year – meaning the logistic giant attained its earnings target for the year.
Group revenue was up by 5.4 per cent to €60.4 billion, and DHL said all four divisions contributed to the surge with the DHL Express segment and the German and international Parcel and eCommerce businesses continuing to see “particularly dynamic growth”.
Express revenue rose by 9.5 per cent on the prior year to €15 billion and the company noted: “Particularly encouraging was the fact that the division registered growth across all regions. This dynamic performance was driven once again by the international time-definite (TDI) delivery business, where daily volumes increased by 9.9 per cent year on year.
“The volume increase will enable the division to utilise its unique global express network even more efficiently. Operating profit grew by 12.4 per cent to €1.7 billion on the back of strict yield management and continuous improvements in the network. The operating margin rose to 11.5 per cent, up from 11.2 per cent in the prior year.”
DHL said performance of the Global Forwarding, Freight division improved over the course of the year. Revenue increased by 5.4 per cent to €14.5 billion in 2017. The division registered significant volume growth in both air and ocean freight. Road and rail transport also developed positively in Europe, particularly in Germany.
It noted: “The division’s EBIT increased by 3.5 per cent to €297 million, although margins in air and ocean freight came under appreciable pressure particularly in the first half of 2017 due to the considerable increase in freight rates.
“In the second half of the year, the division was increasingly able to pass on the higher prices to its customers and with this significantly improve earnings in the last six months.”
DHL said the increase in revenue and earnings in 2017 is also reflected in improved net profit for the year. Consolidated net profit after non-controlling interests was €2.7 billion (2016: €2.6 billion). Net profit increased at a slower rate than EBIT, due primarily to a higher tax rate.
The Post – eCommerce – Parcel (PeP) division contributed €1.5 billion to operating profit.
Revenue increased by 6.4 per cent to €18.2 billion in 2017. The division’s positive performance was primarily attributable to growth in volumes and revenue in the eCommerce – Parcel business unit. eCommerce business unit climbed by 10.3 per cent. However, the most substantial gain was posted by Parcel Europe, where revenue grew by 65.4 per cent.
DHL chief executive officer, Frank Appel said: “Thanks to successful business development in all four divisions, especially outside Germany, our company has registered another very good year. In 2017 we took another major step on the road to achieving our strategic and financial goals for 2020.
“With our international focus and our firm orientation towards the fast-growing e-commerce market, we implemented the right measures early on and are now positioned better than ever for future growth.
“At the same time, we are increasingly leveraging the digitalization opportunities that present themselves in all four divisions and expanding our foundation for a successful future.”
As for the future, DHL expects that the “solid pace of economic expansion, further business growth and operational improvements in the individual divisions in particular will lead to increased earnings in 2018” and forecasts a rise in EBIT to approximately €4.15 billion.