DP DHL records “strong business development” in preliminary Q3 results

Deutsche Post DHL has managed to achieve an increase in earnings before interest and tax (ebit) during the third quarter of this year and recorded “strong business development” ahead of its shift in focus to ‘peak season’.

Chief executive Frank Appel said in the company’s preliminary third-quarter financial results: “We are now fully focused on preparing for an exceptionally strong Christmas business. For this, the safety of our employees and the quality of service for our customers remain our top priorities.”

Preliminary group ebit rose to €1.4bn in the third quarter of this year — a 45% year-on-year increase on the same period in 2019.

The group’s highest-performing division in the third quarter of this year was eCommerce Solutions, which posted a 1,150% year-on-year increase in ebit to €75m.

The company said this was due to an acceleration in “strong B2C volumes in its markets”.

The group’s Global Forwarding Freight division achieved an operating profit of €155m in the third quarter of 2020 — 25% higher than in the same period last year.

Driven by a “strong development in TDI (time-definite international) volumes”, the Express division reported a 65% year-on-year increase in ebit in the third quarter to €750m.

The company said its Supply Chain earnings “recovered due to increasing customer activities”, although the division posted a 32% year-on-year decrease in ebit to €110m.

Operating profit in the Post & Parcel Germany division increased by 5% year on year to €320m — “despite the effects of the one-off payments totalling €-95m”, the company said.

Impacted by effects of the pandemic, the group’s Corporate Functions division recorded a result of €-40m.

Appel added: “Our business has performed very well in the third quarter. Thanks to the outstanding commitment of our 550,000 employees worldwide we were able to significantly benefit from the dynamic ecommerce growth in our businesses.”

In light of its preliminary third-quarter results, Deutsche Post DHL has adjusted its outlook for the full year of 2020.

“The reported group ebit is expected between €4.1bn and €4.4bn; [it was previously between €3.5bn and €3.8bn],” the company said.

“In anticipation of a very strong peak season, in particular driven by the dynamic e-commerce growth, the company is focused on securing all necessary resources required to maintain a high quality service level. Achieving the upper end of the guidance will mainly depend on whether the volume development will allow for an efficient utilization of the networks”.

It added: “The group continues to expect an ebit of around €1.5bn for the Post & Parcel Germany division. For its DHL divisions Deutsche Post DHL Group now forecasts an ebit between €3.3bn and €3.6bn [it was previously between €2.8bn and €3.1bn]. Operating profit in Corporate Functions is now expected at around €-700m [it was previously around € -750m)”.

DHL is set to release its results for Q3 and the first 9 months of 2020 on November 10.