DHL reports 3.1% growth in revenues in Q2 2020

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DHL generated further growth in the second quarter of 2020, despite the impact of Covid-19. Revenue increased by 3.1% year-on-year to €16.0bn, organic revenue growth (adjusted for portfolio and currency effects) was even higher at 4.6%. This was mainly driven by strong growth in e-commerce. Operating profit grew by 18.6% to €912m in the second quarter. EBITDA climbed even by €229m to €1.1bn. With these results, the Group slightly surpassed the preliminary quarterly figures it released in July.

As a result of the company’s good performance in the second quarter, Deutsche Post DHL Group issued new earnings guidance in July for the current financial year: The Group expects its operating profit to reach between €3.5bn and €3.8bn in 2020. This figure includes expenditures of about €400m that were forecast in February for the StreetScooter realignment, the planned one-time bonus payments for employees of around €200m in the third quarter, and non-recurring impairments of about €100m caused by lockdown measures in the second quarter.

The company’s mid-term earnings guidance as given in July remains unchanged. In this guidance, Deutsche Post DHL Group expects Group EBIT of around €4.7bn to more than €5.3bn for 2022 – depending on the shape of the general economic recovery.

In the second quarter of 2020, Deutsche Post DHL Group invested a total of €482m across all divisions (2019: €1,270m). The prior-year figure included €743m, which represents a major part of the total investment in the 777-renewal of DHL Express’ intercontinental fleet.

In the second quarter, revenue in the Post & Parcel Germany division rose by 7.0% year-on-year, to nearly €3.9bn. Operating profit rose by 49.2% to €264m. The improvement was due to the cost and pricing measures taken in both the mail and parcel businesses.

The Express division was able to increase its second-quarter revenue by 6.5% year-on-year to about €4.5bn. Its operating profit climbed to €565m (2019: €521m). At the beginning of the second quarter, the division’s performance was impacted by a sharp drop in volumes. But as the quarter advanced, volumes recovered, particularly in Asia, and ultimately reached in total the level of the same period last year.

The Global Forwarding, Freight division reported revenues of €4.2bn, up 9.7% year-on-year. Operating profit climbed by more than 50% year-on-year to €190m (2019: €124m). The division faced a severe shortage of available air freight capacity resulting from the pandemic. Amid declining volume, however, this shortage of capacity led to a strong development of the gross margin in air freight.

The Supply Chain division experienced a drop in revenue to about €2.7bn in the second quarter (2019: €3.3bn). It was, however, able to report an operating profit of €35m (2019: €87m). In addition to the pandemic-related revenue decrease, EBIT was negatively impacted by non-recurring effects of €62m.

The eCommerce Solutions division reported a 16.8% increase in revenues, totalling €1.2bn in the second quarter. Operating profit improved to €1m despite non-recurring impairments of €30m (2019: -€18m).

Source: DHL

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