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Continuing demand weakness hammered German logistics giant DHL’s Q2 revenues, with its forwarding division bearing the brunt of the bad news.

Group revenue dropped 16%, to €20.1bn ($22.07bn), for the three months to June, some €1.5bn short of analysts’ expectations, leading to a 27% drop in operating profit, to €1.69bn, with CFO Melanie Kreis blaming post-pandemic effects.

On an investor call, she said: “We all knew that normalisation would come after an unusual year in 2022; normalisation is here now.”

That “normalisation” amounted to a 40%+ slump in forwarding revenue (€4.8bn) and a near halving of profit, down 47.2% to €388m, plus a 13% drop in airfreight volumes and a 9.1% dip in ocean freight volumes for the quarter.

In its earnings report, the company pointed to strong declines in China-Europe and China-US air volumes, with soft demand out of China on the ocean side too.

“Yes, the numbers are down significantly for global forwarding when compared with Q2 22, but you also have to bear in mind that Q2 was an extraordinary quarter – it brought us our highest-ever earnings quarter as a group,” said Ms Kreis. “And even when those results came out it was clear that there would be a normalisation, and this normalisation is what is happening now.”

Looking at the half-year performance for the forwarding division, revenue dropped 33.5%, to €10.3bn, with profit down to €777m, 41.8% less than a year ago, with air volumes down 15.9% and ocean volumes down 7.1%.

Express was marginally better, with Q2 revenue and profit down 12.5% (at €6.1bn) and 18.2% (€901m), respectively, with respective half-year revenue and profit declines of 7.2% and 12.9%.

Ms Kreis said of the Express division’s performance: “Volumes are still declining, so we are continuing with a strong focus on yield and cost management, but we’re managing the volume normalisation in very solid way.

“Overall, I would say we have posted a strong set of numbers that measure up well next to recent peer reporting.”

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