DP DHL releases results statement around coronavirus

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Deutsche Post DHL (DP DHL) has released a statement in what appears to be an attempt to reassure investors about its performance despite the full 2019 results scheduled to be published in just over a week.

This seems to be linked to the coronavirus issue although its description of the situation is fairly mild, just commenting that “trade volumes have weakened, not only on the inbound and outbound China trade lanes but also in other countries of Asia”.

The Bonn-based group says that it “had seen a very good start into 2020 in January and was prepared for the usual effects around Chinese New Year in February when the measures of the Chinese government were introduced”. Not all of the company has been affected with Post & Parcel Germany, DHL Supply Chain and DHL eCommerce Solutions only having suffered “marginally”. However, DHL Express and Global Forwarding have been badly hit in China. The cost of this is estimated to be €60-70m for February.

Yet the emphasis of DP DHL statement was on the “continued profitable growth during the past financial year” with revenue for the whole group 2.9% higher year-on-year at €63.3bn and EBIT up 30.6% at €4.1bn, although this latter number is flattered by the previous years’ write-offs. Post & Parcel Germany was more or less on track with “earnings” of €1.23bn, whilst Express saw EBIT of €2bn, Global Forwarding & Freight at €521m and Supply Chain at €912m. eCommerce Solutions saw a loss of €51m.

Obviously, these are not the full numbers and DP DHL’s accounts are often complex, so it is dangerous to make too many assumptions about its 2019 performance. However, it appears that the company has been performing moderately well, in keeping with the generally muted performance of the global logistics economy. This may disguise continued restructuring within the company. For example, eCommerce has terminated the development of its ‘StreetScooter’ vehicle, which must have been an unsustainable indulgence for a logistics company exposed to the difficult business of last-mile deliveries.

Overall, this statement seems to have been driven by nervousness over the impact of the coronavirus with any forecasts for the future performance of the company surely of limited value at present.

Source: Transport Intelligence, March 3, 2019

Author: Thomas Cullen

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