Global portal and logistics leader Deutsche Post DHL raised its full 2012 earnings guidance after its Asia market helped bolster its second-quarter revenue.
While some of its competitors registered losses they attributed to global economic instability, Deutsche Post is profiting from strong growth in emerging markets such as Asia and from rising Internet shopping, which is offsetting a decline in its traditional mail business.
“Things are a bit different than for our competitors because we have a broad network with which we benefit from intra-Asian trade,” said Larry Rosen, the company’s chief financial officer. “We are still seeing good growth in Asia, with the exception of the tech sector.”
The Bonn-based freight forwarding giant said it expects earnings before interest and tax to reach EUR2.6 billion to EUR2.7 billion (US$3.2 billion to $3.3 billion) this year, up from the previous forecast of EUR2.5 to EUR2.6 billion.
The DHL express delivery division is predicted to play a key role in driving the growth in operating profit.
“We continue to perform well,” said Frank Appel, group CEO. “The excellent market positions of our brands and divisions in the world’s growth markets are paying off. We have a strong foundation for generating long-term improvements in revenues and earnings.”
Second-quarter revenues rose 7.3 percent to EUR13.7 billion year-over year, helped by strong growth in its DHL divisions, especially in Asia, as well as favorable exchange rate effects. All four divisions contributed to this gain, the company said.
But net profit in the second quarter fell by 27.7 percent compared to a year earlier, to EUR201 million, as the company had to make a one-time payment of EUR260 million to settle a retroactive VAT charge.
Still, the result was better than what experts had forecast.
Adjusted earnings in the second quarter before interest and taxation of EUR581 million beat a consensus forecast of EUR568 million.
“The group continues to expect that the world economy will grow moderately and that the company—driven by the DHL division—will continue to boost revenues and earnings compared with the previous year,” Deutsche Post said.
Photo courtesy of Deutsche Post DHL
