A tough year for Deutsche Post

Deutsche Post-DHL has announced a mixed set of annual results, with revenue down 15.2% to €46.2bn, whilst Earnings Before Interest and Tax (EBIT) was €231m, up from a big loss last year (negative €966 million). 'Underlying' EBIT, which strips out the continuing write-offs of the Express division in the US, saw a year-on-year fall of 17% at €1.4bn. Net profit was up at €688m. Both revenue and profit improved markedly towards the end of the year, although the write-offs associated with the closure of the Arcandor mail-order business and other losses grew as 2009 wore on.

DHL Supply Chain had a tough year. Revenue fell by 8.8% to €12.5bn but the division crashed to a loss (EBIT) of €121m. This was heavily influenced by the problems at Arcandor, with the company claiming both increasing market-share and a profit of $192m if these items had been stripped out.

The 'Global Forwarding, Freight' division has also not prospered during the recession. Although still in profit, its margins seemed to have weakened disproportionately with revenue falling by 23.8% to €10.3bn yet EBIT down 47.2% at €191m. Underlying EBIT was down 32%. It also appears that as volumes in the sector climb, Forwarding's margin continue to deteriorate, with the Fourth Quarter EBIT down 68% year-on-year despite revenue being just 17% lower.

Express continued to be burdened by its US write-offs, although in fact its business fell heavily across the world with revenue down by 24% at €10.4bn and an EBIT of €807m. DP-DHL asserted that in underlying terms, however, Express made a profit of €238m.

Mail was more stable although its EBIT also fell steeply at 36.5% to €1.4bn, again driven in large part by the Arcandor write-offs. Revenue, however, was down only 4.9%.

Despite an upbeat tone from the CEO, Frank Appel, DP-DHL continues to see red ink in much of its numbers. Whilst there may be underlying growth, the company still continues to encounter problems such as those at Arcandor, whilst Global Forwarding's performance, for example, is not as robust as it might be.

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