By Bruce Barnard / www.joc.com / November 11th, 2015
Deutsche Post DHL’s operating profit slumped by over 70 percent in the third quarter due mainly to continuing problems at its global forwarding and freight unit.
The German mail and logistics giant earned 197 million euros ($ 213 million) before interest and tax, down from 677 million euros a year earlier as revenue grew 3 percent to 14.4 billion euros.
Consolidated net profit was almost 90 percent lower at 49 million euros against 468 million euros last time.
The results were impacted by a 345 million euro write off as the company decided to terminate an unsuccessful IT revamp at its DHL Global Forwarding. There was an additional 200 million euro write off related to legal and regulatory issues at it parcel, express, freight and forwarding divisions.
As a result, the company has trimmed its full year EBIT forecast to a minimum of 2.4 billion euros from 2.95 billion to 3.1 billion euros previously.
DHL Express remained the best performing business with revenue climbing 6.9 percent to 3.3 billion euros, driven mainly by ongoing strong growth in international time definite shipments, which grew 9.4 percent year-over-year. Earnings before interest and tax soared 19.3 percent to 364 million euros from 305 million euros last time.
The troubled global forwarding and freight division’s EBIT sunk to a negative 337 million euros from a positive 71 million euros a year earlier and revenue declined by over 27 percent to 3.59 billion euros.
Deutsche Post said the write offs coupled with structural improvements across its individual businesses should contribute to a significant increase in the group’s EBIT in 2016 to between 3.4 billion and 3.7 billion euros.
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