DP DHL profit growth in Q2 propelled by Express TDI business

Deutsche Post DHL Group has reported its Q2 and H1 results for 2017, with total quarterly revenues up by 4.4% to €14,813m, and EBIT improving significantly, by 11.8% to €841m. Whilst the revenue growth was in line with expectations, the marked increase in profitability was down to significantly improved performance in the Supply Chain and Express divisions.

“We are very satisfied with both the second quarter and the entire first half of the year. Our company is growing in all areas and steadily increasing earnings,” said Frank Appel, CEO of Deutsche Post DHL Group. “Our good results so far this year demonstrate that we are right on track to achieve our EBIT targets for full-year 2017. We also remain optimistic about the coming years. All of our divisions, thanks to their focus on fast-growing markets such as global e-commerce, are optimally positioned for long-term growth,” he added.

Revenue in the Post – eCommerce – Parcel (PeP) division rose by 4.8% to €4,072m in the second quarter, with EBIT up 4% to €259m. The division’s growth was driven by volume increases in the eCommerce – Parcel business unit, which saw a top line improvement of 13.6% to €1,978m. Parcel Europe (up 61.5%) and eCommerce (up 15.1%) were the leading segments, with Parcel Germany seeing growth limited to 1.3%. A key factor behind the strong increase in revenue at Parcel Europe was the inclusion of the UK Mail business in the unit’s consolidated results after the British company’s acquisition in December. UK Mail generated revenue of €127m in the second quarter. Organically, revenue at Parcel Europe increased by 21.2%. In the Post business unit, revenue saw a slight decrease of 1.8% to €2,290m due to structural volume declines, mainly in the area of Mail Communication. Nonetheless, Dialogue Marketing actually produced a 3.4% increase in revenue during Q2, with volumes rising by 4.7%.

Revenue in the Express division rose by 8.7% on the prior year to €3,750m, driven by 8.5% volume growth in the international time-definite (TDI) delivery business. The division’s EBIT increased by 12.2% to €469m, again driven by the growth in TDI business. Quarterly revenues grew most significantly in the Americas (10.4%), whilst Asia Pacific also reported substantial growth (8.2%). Europe and MEA demonstrated more moderate increases, at 6.9% and 4.8%, respectively.

Revenue in the Global Forwarding, Freight division rose by 5.5% to €3,612m in the second quarter of 2017. In line with the market trend, the division registered significant growth in revenue and volumes in both the air freight and ocean freight businesses, though it has not yet been able to translate this into increased profitability due to the duration of most contracts; EBIT declined slightly, to €67m from €69m in 2016. Air freight revenues increased by 5.7% to €1,130m, with Ocean freight up 8.4% to €881m. Revenues also increased significantly in the company’s industrial projects business, which as part of the ‘Other’ business unit, grew by 15.1% in Q2. DHL Freight, the company’s European road freight business, saw revenues increase slightly, up 0.9% to €2,171m for the quarter, whilst EBIT declined 10.83% to €107m.

DHL Supply Chain recorded a minor decline in revenues, which contracted by 0.7% year-on-year to €3,515m, though DP DHL Group noted that negative currency effects skewed this result somewhat. However, EBIT in the division increased substantially, rising by 21.6% to €124m (5.1% with the exclusion of one-off costs during the previous year).

Source: DP DHL Group