Market Insight: Copenhagen, Caput Mundi, teases Berlin – a mighty battle looms
Two armies poised for action.
Deutsche Post-DHL today reported record quarterly financial results, as all its divisions saw rising volumes, revenues and profits.
Group revenue grew 22% to €18.9bn ($22.7bn), while ebit more than tripled to €1.9bn, as its divisions “benefited from the continued strong momentum in global e-commerce and the simultaneous recovery in world trade”.
Chief executive Frank Appel said: “Because of our strategic investments in our networks, we are today in a position to benefit from the surge in demand, while simultaneously improving our efficiency.
“We expect further growth in the coming quarters, even with growth rates normalising over time. We are therefore stepping up investments in our infrastructure to be able to continue to optimally serve higher shipment volumes.”
Its Global Forwarding, Freight division saw revenue grow 32.7% year on year, to €4.8bn, with forwarding revenue (the division also includes its European road transport operations) growing 43.6%, to €3.59bn.
This was on the back of an 18.2% growth in air freight volumes, to 494,000 tonnes, and an 8.8% growth in ocean freight, to 764,000 teu – largely driven by demand from Asia to North America.
The division’s ebit surged from €74m in Q1 20 to €216m this year.
Meanwhile, it Supply Chain division, subject to a large-scale restructure following the divestment of its Chinese operations, saw revenue stable at €3.24bn, while ebit grew 59%, to €167m, “due to improved productivity”, said chief financial officer Melanie Kreis.
“Supply Chain is back on track for growth. Our customer activities continued to grow, with revenue being organically 4.7% above the previous year,” she added.
“At the same time, we benefited from the fact that we pushed ahead with standardisation and swiftly implemented cost-cutting measures last year. Our new business also continued to develop well, with revenue on an annualised basis of €313m.”
Its largest earner remained its Express division, which saw revenue grow 32.5% year on year, to €5.5bn, while ebit surged 144% to €961m with its operating margin growing to 17.5%.
“A record result in the first quarter,” said Ms Kreis. “Volumes in our core TDI product, time-definite international shipments, increased 26% worldwide compared with the previous year.”
She added: “Our new B777 freighters came at the right time, with more to follow soon.
“We have also further expanded our network, with strong partners. Among others, holiday travel airline Condor is now flying cargo for Express as long as there is depressed demand in passenger travel due to Covid-19.”
Its E-commerce Solutions division saw revenue grow 46%, to €1.45bn, due to higher volumes, and ebit grew to €117m, compared with €6m the year before.
The group today raised its full-year groupwide guidance to a projected 2021 ebit of €6.7bn.
Ms Kreis said: “The boom in e-commerce we saw last year continued in the first quarter. At the same time, world trade recovered rapidly and economic recovery is looking increasingly robust. We successfully adapted our networks to the global increase in demand.
“The significantly higher shipment volumes and further progress in cost management allow us to achieve more efficient capacity utilisation – for these reasons, we have raised our earnings forecast.”