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Deutsche Post Q1 Profit Surges; Backs Forecast

5/8/2012 2:30 AM ET

Deutsche Post DHL (DPSTF.PK) Tuesday said it continues to expect earnings growth in 2012 and beyond, driven by its DHL divisions. The German postal and logistics giant presented the positive forecast after reporting a 64 percent surge in first-quarter profit that reflected strong Asian performance.

CEO Frank Appel said, "Given the somewhat subdued global economic environment, our successful start into the year is clear evidence for us continuing to build on our strengths. The efficiency improvements we have achieved in recent years and our unmatched position in the world's growth markets have prepared us well for continuing on our profitable growth path."

In the first quarter, consolidated net profit climbed 64 percent to 533 million euros and earnings per share grew 63 percent to 0.27 euros. The company said its prior year results have been adjusted. The profit growth partly reflects the final effects of 186 million euros from the sale of Postbank.

Revenues grew 4.3 percent to 13.36 billion euros with a 5.8 percent increase in international revenues. Deutsche Post said its DHL divisions played a major role in the positive development mainly boosted by its performance in the world's rapidly growing regions - particularly in Asia.

Revenues in the MAIL division edged up 1.1 percent as a decline in volume and revenues in the traditional mail business was more than offset by strong performance in the parcel business.

Group EBIT (profit from operating activities) rose 9.9 percent to 691 million euros, thanks to further profitability improvements in all divisions, mainly DHL.

Looking ahead for fiscal 2012, Deutsche Post said it expects that the world economy will produce moderate growth this year and the company - driven by the DHL divisions - will generate continued gains in revenues and earnings, despite continuing economic uncertainties.

The company continues to expect Group EBIT to range between 2.5 billion and 2.6 billion euros. Of this, MAIL division's earnings would be between 1 billion and 1.1 billion euros, while DHL's earnings are still expected to rise to around 1.9 billion euros.

The company continues to project that its consolidated net profit adjusted for effects related to the Postbank sale will increase in line with the operating business.

Looking beyond the current fiscal year, the company remains optimistic and expects that its earnings will continue to rise. MAIL division's profitability would be stabilized with cost measures and growth programs, while DHL divisions would generate average annual earnings growth of 13 percent and 15 percent between 2010 and 2015.

Deutsche Post shares closed Monday's trading at 14.26 euros, up 0.28 euros or 2 percent on Frankfurt's Xetra.

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by RTT Staff Writer

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