DHL maintains its profitable growth trajectory in 2020 despite the impact of the Covid-19 pandemic
Deutsche Post DHL Group maintained its profitable growth trajectory in Q1 2020 despite the noticeable impact of the Covid-19 pandemic. Revenue improved by 0.9% to €15.5 billion, and operating profit (EBIT) came in at €592 million. Adjusted for a pandemic-related negative earnings impact of €210 million as well as negative effects of €234 million incurred in the first quarter to realign the Group’s StreetScooter activities, operating profit stood at approximately €1 billion. This result came in around €200 million over the prior-year figure adjusted for non-recurring items. The Group has with this confirmed the preliminary quarterly figures published in April.
“We are making an essential contribution to managing the crisis, with 550,000 employees in every country of the world and our unmatched global logistics network. Our mission involves transporting protective equipment and medicines, securing industry supply chains and helping to deliver supplies to local populations. We are proud of our teams, who make the impossible possible every day. They also form the basis for Deutsche Post DHL Group performing so well in the first quarter, despite the challenges seen across the globe,” said Frank Appel, CEO of Deutsche Post DHL Group.
All five divisions report first-quarter profits. Thanks to the Group’s extraordinarily broad geographic footprint and comprehensive portfolio of logistics solutions – ranging from international express services, global air and ocean freight transport to warehousing, e-commerce solutions as well as post and parcel solutions in Germany – Deutsche Post DHL Group is more robustly positioned than other companies and thus well situated to navigate crisis situations. Since the coronavirus began spreading around the world, various activities in the different regions performed better and in some cases worse than originally planned.
“The crisis once again demonstrates the value of our broad and resilient portfolio,” said Appel.
For example, while parcel volumes in the Post & Parcel Germany division increased significantly at the end of the quarter, letter mail registered pronounced declines. While the DHL divisions felt the effects of the standstill in many regions and customer industries, business in China experienced a recovery in March after the drop in February. Globally, the Group saw a strong increase, especially in the food and health care sector. Furthermore, thanks to its own fleet of cargo aircraft, Deutsche Post DHL Group proved to be one of the few providers in the world still able to transport urgent deliveries.
“Thanks to our good balance sheet and liquidity situation, we were again able to invest almost half a billion Euros in the first quarter, despite Covid-19. We have thus strengthened our global network and prepared ourselves for further profitable growth in the future,” said Melanie Kreis, CFO of Deutsche Post DHL Group.
DHL Express also succeeded in increasing revenue and generating very good earnings in the first quarter despite the Covid-19 pandemic. Revenue improved by 4.5% to €4.2 billion. The availability of its own fleet of cargo aircraft proved to be a key factor for the division, allowing it to still offer urgent delivery to customers despite the virtual standstill in passenger flights resulting in the loss of freight capacity in many regions of the world.
Revenue of Global Forwarding, Freight decreased by 4.1% compared with the previous year to €3.6 billion. The division is confronted with a severe shortage of available market capacity due to the pandemic, owing for example to the cancellation of passenger flights. With declining volumes, the capacity shortage led to a positive gross-margin development in air freight.