BONN: Deutsche Post DHL says it is not providing an earnings forecast for 2015 due to the costs associated with restructuring its supply chain, global forwarding and freight businesses.
The company says the expected costs for establishing what it describes as a "New Forwarding Environment" will lead to a one-time negative impact on the company's operating earnings in 2015.
However it is forecasting a higher group EBIT the following year of €3.4 billion to €3.7 billion made up of €2.45 billion from the DHL divisions and €1.3 billion from its Post/e-commerce/parcel business (PeP).
For the first six months (H1) of 2014, the group reported a drop of 2.1 percent in its forwarding and freight business to €7.3 billion due to what it describes as a "challenging market environment".
Earnings before interest and taxes for H1 dropped a dramatic 30.4 percent to €149 million due to continued lower gross profit margins.
H1 express revenue rose 2.4 percent to €5.96 billion to produce an EBIT of €607 million - a rise of 16.1 percent. The PeP business had revenue of €7.6 billion, a rise of 1.8 percent, and an EBIT of €585 million – a fall of 7.9 percent.
For the full year, the DHL branded divisions are forecast to produce an EBIT of €2.0 billion to €2.2 billion and the PeP business will contribute a further €1.3 billion.
The company says it expects average earnings to rise eight percent per annum to 2020. The DHL divisions will remain the main contributor to growth with an average EBIT of approximately 10 percent per year.
In a coincident move, DHL Global Forwarding has completed a large part of an ocean project (above) that began three months ago. To date, 15 bulldozers, 20 loaders, 10 excavators, 60 motor graders and 20 tippers plus various spare parts have been delivered from Nordhausen via Hamburg to Ghana on behalf of the family-owned construction company GP Günter Papenburg. Some 80 more machines are due to be shipped in Q4 this year.