One off effects impact Deutsche Post DHL Q3 profits

Deutsche Post DHL has reported a dip in profits due to what the German parcels and logistics giant referred to as ‘one off events’. Consolidated net profit fell to €49m compared to €468m in the same quarter in 2014, mainly due to the decline in earnings before interest and tax (EBIT). Revenues however increased by 3% to €14.4bn.

As previously reported by Apex Insight, the delivery group announced a write down of €345m due to the IT programme failures at DHL Global Forwarding and €200m that “relate mainly to the updated assessment of primarily legal and regulatory exposures in the Post – eCommerce – Parcel (PeP), Express and Global Forwarding, Freight divisions”.

Due to these exposures, Deutsche Post DHL lowered its 2015 EBIT guidance, and now expects operating earnings of around €2.4bn. This is down form around €3bn.

The Group has also been investing heavily in building for the future. For example, with the rapid growth of e-commerce the PeP division of the Group has been investing heavily in its international parcel delivery business away from Germany.

PeP saw revenues increase by 2% in Q3, in a large part due to the eCommerce – Parcel unit, which in itself grew by 9.7% in the last year. Parcel Germany saw growth of 7% while Parcel Europe grew by 8.4%. E-commerce grew by 20.9%.

However the general decline of the mail side of the Group’s business has impacted revenues, and this was coupled with a postal workers’ strike earlier this year. Operating earnings in PeP fell to €142m compared to €288m last year, in a large part due to an increase in expected payments for civil servant pensions in Germany.