Deutsche Post DHL (DPSTF.PK) reported Thursday a sharp decline in second-quarter profit reflecting a one-time VAT payment in the MAIL division. The company, however, said that helped by DHL divisions, it expects to report better earnings and revenue for the second half. Accordingly, the German postal and logistics firm lifted its fiscal 2012 forecast for EBIT, a key earnings metric.
Chief Executive officer Frank Appel said, "The excellent market positions of our brands and divisions in the world's growth markets are paying off. We have a strong foundation for generating long-term improvements in revenues and earnings."
For the second-quarter, consolidated net profit fell 27.7 percent to 201 million euros. Earnings per share decreased 26 percent to 0.17 euros.
The latest-quarter results were hurt by 260 million euros of items mainly related to the one-time subsequent VAT payment, partly offset by positive one-time effects at DHL Express.
Adjusted for these items, profit and earnings per share would have increased in the second quarter, the company said.
Group profit from operating activities or EBIT fell 3.4 percent to 543 million euros despite further profitability improvements. Excluding one-time items and the sale of a subsidiary in the SUPPLY CHAIN division, EBIT would have increased 8 percent.
DHL divisions remained as the company's growth driver with 11 percent increase in profit. The MAIL division also helped boost the operating profitability thanks to its dynamic parcel business and its ongoing strict cost management.
Deutsche Post's revenues increased 7.3 percent to 13.73 billion euros, with all four divisions contributing to this gain. International revenues grew 10 percent to 9.73 billion euros.
For the first half, net profit grew 21.7 percent to 734 million euros or 0.61 euros per share, and revenues increased 5.8 percent to 27.10 billion euros.
Looking ahead, for the second half of the year, Deutsche Post continues to expect that it would post higher revenues and earnings with the help of the good performance at its DHL divisions.
For fiscal 2012, the company now expects EBIT between 2.6 billion euros and 2.7 billion euros higher than previous estimate between 2.5 billion euros and 2.6 billion euros. The company also continues to assume that net profit adjusted for non-operational effects will increase in line with the operating business in 2012.
Looking beyond the year 2012, Deutsche Post said it remains optimistic and expects that its positive earnings trends will continue. The company expects operating result should rise to between 3.35 billion euros and 3.55 billion euros by 2015 and earnings at DHL would rise by an average of 13 percent to 15 percent annually between 2010 and 2015.
Deutsche Post shares are currently trading at 15.05 euros on Frankfurt's Xetra, up 0.37 euros or 2.52 percent.
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