Deutsche Post DHL takes profit hit due to coronavirus

As the coronavirus pandemic continues to spread, so global logistics player Deutsche Post DHL has taken a €70 million operating profit hit in February as Asian trade volumes fell due to issues around containing the virus.

Chief executive Frank Appel said: “It is currently hard to judge how strong the impact of the Coronavirus will be,” as the company warned that in recent weeks trade volumes had weakened across inbound and outbound China trade lines.

Deutsche Post DHL also warned that both inbound and outbound volumes have been hit across Asia – not just China – and this is set to worsen in the short term.

The two business units DHL Express and DHL Global Freight Forwarding have been affected the most thanks to cross-border trade flows. Other divisions such as Post & Parcel Germany and DHL eCommerce have also seen issues but to a lesser extent.

There are two possible outcomes. If the crisis deepens globally Deutsche Post DHL could lose money. If it is a shorter term problem there could be benefits from a bounce-back.

Appel said: “Deutsche Post DHL Group had a very good year 2019 and a successful start to 2020 in January. Thanks to our broad geographic set-up and our comprehensive portfolio we are more resilient than other companies. However, a worldwide crisis like the Coronavirus does not leave us unaffected. It is currently hard to judge how strong the impact on our business will be. That is why our guidance is as of now excluding any impact of this.”