Executive Briefings

DP-DHL Reports Robust Third Quarter in All Divisions

A year after Deutsche Post DHL Group (DP-DHL) pulled the plug on its comprehensive IT system, much has gone right for the express mail and logistics company, leading to what it describes as the strongest third quarter in the company's history.

For the quarter, the group increased operating profit significantly. Earnings before interest and taxes (EBIT) rose to €755m ($815.29m), year-over-year, representing the company's best-ever performance for the third quarter. DP-DHL attributed the spike to "sustained organic growth in operating profit" across all divisions, in addition to the non-recurrence of substantial one-time effects.

Group revenue fell by 3.9 percent to €13.9bn ($15.01bn) in the third quarter, ending Sept. 30, compared to the same period last year, due to a combination of negative currency effects, lower fuel surcharges due to falling oil prices, and "a change in the recognition of revenue generated from a key customer contract in the supply chain division, which took effect in the fourth quarter of 2015."

Notably, the Post – e-commerce – Parcel (PeP) division was a significant contributor to the €558m ($602.56m) increase in third-quarter Group EBIT.  Operating profit at PeP more than doubled to €295m ($318.56m), year-over-year, primarily as a consequence of the postal strike in Germany.

"Even after adjusting for this effect, the increase in EBIT was significant," the company said. "The improvement was primarily fueled by the revenue growth, the increase in postage prices, disciplined cost management and sustained growth at e-commerce – Parcel."

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For the quarter, the group increased operating profit significantly. Earnings before interest and taxes (EBIT) rose to €755m ($815.29m), year-over-year, representing the company's best-ever performance for the third quarter. DP-DHL attributed the spike to "sustained organic growth in operating profit" across all divisions, in addition to the non-recurrence of substantial one-time effects.

Group revenue fell by 3.9 percent to €13.9bn ($15.01bn) in the third quarter, ending Sept. 30, compared to the same period last year, due to a combination of negative currency effects, lower fuel surcharges due to falling oil prices, and "a change in the recognition of revenue generated from a key customer contract in the supply chain division, which took effect in the fourth quarter of 2015."

Notably, the Post – e-commerce – Parcel (PeP) division was a significant contributor to the €558m ($602.56m) increase in third-quarter Group EBIT.  Operating profit at PeP more than doubled to €295m ($318.56m), year-over-year, primarily as a consequence of the postal strike in Germany.

"Even after adjusting for this effect, the increase in EBIT was significant," the company said. "The improvement was primarily fueled by the revenue growth, the increase in postage prices, disciplined cost management and sustained growth at e-commerce – Parcel."

Read Full Article