DHL slashes targets - waiting for the upswing
The special economic situation following the end of the coronavirus pandemic is over and global trade is not picking up. For Swiss Post, this means a slump in earnings in the summer. The mixed situation is also forcing the Group to make considerable cuts to its medium-term targets.
The good years are finally over for Swiss Post: Less freight and fewer express shipments as well as sluggish global trade are weighing on the Group. The Bonn-based DAX company, which operates under the name DHL Group, took in less and earned less in the summer than in the previous year. The results forced the Group to cut its forecast. The Group is not alone in this. Other logistics companies also posted declines. "It was clear that we would experience a setback this year," said CFO Melanie Kreis. However, the Group is well prepared for a new upswing. After initial losses, Swiss Post shares were up more than one percent at midday.
Between June and the end of September, Swiss Post generated revenue of 19.4 billion euros, almost a fifth less. The operating result (EBIT) plummeted to 1.4 billion euros. The decline, which was also expected by analysts, has an impact on the forecasts: Swiss Post now expects an EBIT of between 6.2 billion and 6.6 billion euros for the year as a whole. Where exactly it will end up also depends on how the important Christmas business goes. After nine months, Swiss Post, with its 589,000 employees worldwide, already has 4.7 billion euros here. The bottom line after three quarters is 2.7 billion euros - a good third less.
The Group is now also less optimistic for the year 2025. It expects earnings (EBIT) of between seven billion and eight billion euros instead of more than eight billion euros. "Global trade has normalized after the pandemic-related boom and the macroeconomic recovery has so far failed to materialize, even against the backdrop of higher interest rates and geopolitical crises," said the new Post CEO Tobias Meyer.
End of the special boom
Last year, the Group was still on course for record figures - high freight rates and booming online trade had brought rapid growth to Swiss Post and other logistics giants during the coronavirus crisis. This boom is now over and business is returning to normal. In its home market, the Group has also been struggling for years with falling letter volumes and rising costs. It therefore also wants to invest less in Germany.
In the long-flourishing express business, turnover in the quarter fell by almost a fifth to 5.9 billion euros, while operating profit fell even more sharply by more than a third. The freight division also suffered, with profits falling by almost half to 306 million euros after the boom years of the past. "We (see) a further normalization of freight rates," said Meyer. "In addition, lower freight volumes and negative exchange rate effects had a negative impact on earnings." However, he expressed confidence that the Group would be able to achieve its new forecast range for the year as a whole. "How exactly the end of the year will develop depends on the pre-Christmas business."
Swiss Post's competitors are also currently experiencing problems. The US giant UPS reported a slump in turnover of almost 13 percent to just over 21 billion dollars for the third quarter, while operating income fell by 50 percent. The company, which is also struggling with home-made problems following a strike in its home market, had slashed its forecast. The freight giant Kühne + Nagel also recorded a slump in profits.
- Despite the negative quarterly figures for DHL Group, which includes Swiss Post, the company remains optimistic for an economic upswing and a recovery in the logistics sector.
- In Q3, German Post's rival DHL also reported a decline in earnings, with profits dropping in both the express and freight divisions, reflecting the overall challenging economic situation for Dax companies in the logistics sector.
- The economic downturn in the logistics industry has also affected other major players, such as UPS, which reported a significant slump in turnover and operating income, and Kühne + Nagel, which recorded a decrease in profits.
Source: www.ntv.de
