DHL sees double 3rd quarter earnings as airfreight demand continues to surge

DHL Global Forwarding and Freight saw third-quarter earnings before interest and tax (ebit) more than double on last year while airfreight demand continued to surge.

The Deutsche Post-owned forwarder saw third-quarter revenues increase by 53.3% year on year to €5.7bn and ebit was up 140% to €372m.

Meanwhile, airfreight volumes in the third quarter increased by 34.4% year on year to 524,000 tonnes, air revenues improved by 52% to €2.1bn and air gross profit was up 25.9% to €326m.

The company said the performance was “buoyed by the global trade recovery”.

“We registered year-on-year growth of 34.4 % in airfreight volumes in the third quarter of 2021, due mainly to global trade in goods,” DP DHL said.

“The highest growth was attributable to the trade lanes between Asia and the US.”

Airfreight rates across the market have continued to improve this year, which has supported revenue and profit growth.

“Gross profit and EBIT/GP conversion are currently supported by the rate environment reflecting tight and partly disrupted capacities in air and ocean freight,” DP DHL said.

“In line with the general industry view, our expectations are that ocean and air rates will eventually come down.

“However, this is expected to be a rather slow and gradual normalization with no signs for this process to happen soon.

“The higher EBIT/GP conversion also reflects process improvement realized as part of our ‘Simplify’ program.

“Based on the now fully rolled out new Transport Management System (TMS) we see indeed increased efficiencies in handling files internally as well as improved transparency in how we act in the market.

“Further process improvements can still be leveraged from the new TMS system, which will hence help to at least partly offset potential conversion head winds as a result of rate normalization.”

For comparison, DSV saw its third-quarter airfreight revenues increase by 78.7% year on year during the period to DKr18.4bn and volumes were up by 28.8% to 386,702 tons. Its results were boosted by the takeover of Agility GIL.

Overall, DP DHL increased its revenue by 23.5% year on year to €20bn and ebit in the third quarter of 2021 increased by 28.6% €1.8bn.

Frank Appel, chief executive of DP DHL Group, said: “Our business continued to develop extremely positively in the third quarter of 2021.

“After nine months, we have already exceeded our record full-year result from the previous year.

“Based on this substantially higher earnings level, the prospects for Deutsche Post DHL Group’s future development remain positive: Global trade returns to its old strength.

“Online shopping is maintaining its new higher level. With our focus on e-commerce and digitalization, we have positioned Deutsche Post DHL Group excellently.”