DP DHL prepares for “very strong” peak season as Q3 revenues rise

Deutsche Post DHL Group (DP DHL) achieved increased revenues and operating profits during the third quarter of this year, despite the period being “an economic climate dominated by Covid-19”.

As the company prepares for a very strong peak season, the company said its third-quarter performance was a result of its “strong position” in e-commerce.

In its third-quarter financial results, DP DHL reported a 4.4% year-on-year increase in revenues to €16.2bn and a 46.2% year-on-year climb in earnings before interest and tax (ebit), or operating profits, to €1.4bn.

Year-to-date, group revenues increased 2.8% to €47.7bn and ebit increased 0.4% to €2.9bn.

Chief executive Frank Appel noted: “We had a successful third quarter thanks to our 550,000 employees and to our outstanding portfolio of e-commerce logistics solutions benefitting both small and large customers globally.

“With our global services, we keep the world economy running even during the crisis. Every day, our employees perform exceptionally well under challenging conditions to provide our customers with the best possible service.”

The group’s highest-performing division in the third quarter was eCommerce Solutions, which posted a 26% year-on-year increase in revenues to €1.2bn. Ebit in the division climbed 1166.7% to €76m.

The company said this was due to “strong volume growth in the private consumer business in Europe and the Americas”.

Driven by “significantly higher” volumes in all regions during the third quarter, the group’s next-best performing division in the third quarter was Express, which saw revenues climb to €4.9bn — 14.6% higher than in the same period last year. Operating profits rose 66% to €753m.

The company said its Express division’s results were also positively impacted by an increase in volumes of time-definite international Express shipments.

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The group’s Global Forwarding Freight division achieved revenues of €3.8bn — 1% higher than in the third quarter of last year. Operating profits increased 25% to €155m.

The company said this division’s performance was due to “positive year-on-year margin development in the airfreight business, which had a notable effect on earnings and compensated declining volumes”.

It added: “In addition to the continued lack of cargo capacity on international passenger flights, the division was confronted with a further shortage of ocean freight capacity.”

The Post & Parcel Germany division experienced a 3.4% year-on-year increase in revenues to €3.8bn. Ebit increased 5.3% to €320m.

“The pandemic significantly accelerated the long-term trend of rising parcel volumes and decreasing mail volumes,” the company said. “Earnings were positively impacted by the cost and pricing adjustments made in both the letter mail and parcel business.”

The company added that its Post & Parcel Germany division was positively impacted by the “e-commerce boom in the German parcel business”.

The group’s Supply Chain division saw revenues drop to €3.1bn — 8.6% less than in the third quarter of 2019. Operating profits declined 31.5% to €111m.

“The division achieved this good performance in a volatile market environment thanks to its high cost discipline and its flexibility in finding new solutions for customers,” the company said.

In anticipation of peak season, driven in particular by e-commerce growth, DP DHL said it is now focused on securing the resources required to maintain a “high quality service level”.

The company has also adjusted its outlook for its full-year results.

“DP DHL now expects operating profit to reach between €4.1bn and €4.4bn in 2020,” the company said.