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DeutschePost DHL writes off €345 million

BONN: DeutschePost DHL has reported a net profit of just €49 million for Q3 2015 - down 89.5 percent from the same period last year – on a 3.0 percent increase in revenue to €14.4 billion.

Revenue at its troubled Global Forwarding, Freight division fell 5.7 percent to €3.6 billion year-on-year as the group wrote off €345 million in development and implementation costs of its planned New Forwarding Environment (NFE) IT system.

dhl supplychain automotiveAs a result, the division's EBIT fell to -€337 million compared to +€71 million in Q3 2014, and included €308 million write-down of NFE investments, €37 million in pilot program costs, and €39 million relating to a legal dispute with a joint venture partner.

Last month DPDHL said it was "still weighing potential alternatives to NFE" while looking at implementing a step-by-step replacement and upgrade of the DHL Global Forwarding IT platform: "This could rely on a flexible IT architecture, potentially enhancing and converging existing systems and also incorporating advanced 'off-the-shelf' solutions that have been commercially proven within the freight forwarding industry," said the company.

Group revenue for the first nine months of 2015 rose 6.4 percent to €43.9 billion although the net profit fell 39.2 percent year-on-year to €870 million due to what the company cited as "legal and regulatory exposures in the Post - eCommerce - Parcel (PeP), Express and Global Forwarding, Freight divisions" in addition the effects of a strike by German postal workers.

Frank Appel, group CEO said 2015 was a transition year: "We are working systematically to position each of our business divisions optimally and to achieve the long-term targets projected in Strategy 2020. We have recorded a number of one-off effects, which will de-risk and strengthen our ability to meet or exceed those targets. We expect that the benefits will begin to materialize already in 2016."

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