News / Financial battering for DHL GF in Q3 – 'but we expected that'

DHL Global Forwarding took a financial battering in the three months to September, with ebit and revenues down more than 40% against 2022’s performance.

During an earnings call this morning, the executive team said the performance had not been unexpected, with chief financial officer Melanie Kreis noting how dependent forwarding was on macro-economic trends.

“We have seen a quarter of relatively low volumes; these then combined with expected normalisation of rates, which led to the results we have – it was not surprising,” she said.

Over the course of the third quarter, divisional revenue for Global Forwarding fell 44% to €4.4bn ($4.7bn), compared with the €7.9bn for the same period in 2022. Earnings fell slightly harder, down 46.6%, to €306, compared with 2022’s €573m.

Year-to-date figures were equally low, with a 37% year-on-year fall, to €14.7bn, in nine-month revenue, with earnings for the period down 43.3%, to slightly over €1bn.

Announcing projections for 2025, CEO Tobias Meyer admitted the company was being “cautious” when it came to forecasting the role Global Forwarding would play. He told investors: “It takes time for profits to emerge in forwarding, as we need to cycle through contracts that are six, nine, 12 months long.

“And exactly how the air and ocean freight markets are panning out, it is too soon for us to judge, but we have become a bit more cautious on when the cyclical upturn will happen, and when this will translate into profits, but this is usually where forwarding contributes.”

Acknowledging that restocking issues had played a role in confusing the sector, he said some of DHL’s customers were holding “a lot of inventory”.

While forwarding took the biggest hit, at Express, Q3 revenues shrank 18.2%, to €5.8bn, with e-commerce revenue seeing a more marginal decline of just 0.8%, to €1.4bn – although there was a silver lining as supply chain and post and parcel revenue was up 0.8% and 0.3%, respectively.

Overall, though, the group found itself 19.8% down, on Q3 22, with total revenues of €19.4bn and an ebit of €1.37bn, a decline of 32.4%.

Mr Meyer said: “Global trade has continued to normalise after the pandemic-related boom and the recovery of the global economy has so far failed to materialise, also against the backdrop of higher interest rates and geopolitical crises.

“We have planned for different scenarios early on and are therefore well on track to achieve our targets for the year.

“In the current market environment, we will keep a close eye on our costs and continue to invest in growth areas of our global business and our service quality. We are well prepared for the moment when the global economy recovers.”