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<blockquote data-quote="moreluck" data-source="post: 82845" data-attributes="member: 1246"><p>BONN, Germany, March 14 (Reuters) - German mail and logistics group Deutsche Post expects further losses at its express courier unit in the United States and forecast flat group operating profit in 2006, sending its shares down sharply.</p><p>Deutsche Post said on Tuesday group earnings before interest and tax (EBIT) in 2006 will be at least 3.7 billion euros ($4.4 billion), compared with 3.76 billion in 2005. It repeated it expects EBIT to be at least 5 billion euros by 2009.</p><p>DHL Express was expected to make a strong improvement in the United States in 2007, but Post Chief Executive Klaus Zumwinkel told a news conference he did not expect it to post a profit that year.</p><p>"Further action is needed for the express business in the USA. We need to eliminate the problems we have identified," Zumwinkel said. Post last month abandoned a target to break even at DHL Express Americas in the fourth quarter of 2006.</p><p>Shares in Deutsche Post were 5.7 percent lower at 21.42 euros by 1331 GMT, making them the worst performers in the German blue-chip DAX <.GDAXI> index. They touched a low of 21.01 euros, their lowest since early January.</p><p>Deutsche Post is expanding its DHL express and logistics businesses as well as extending its mail activities abroad to reduce dependency on the German postal market, where its monopoly is due to run out at the end of 2007.</p><p>The mail division still contributes the majority of earnings.</p><p>But DHL Express is struggling with losses in the United States following the purchase of Airborne Express in 2003, as it expands to take on dominant U.S. rivals United Parcel Service Inc. and FedEx Corp. in their home markets.</p><p>John Mullen, the Deutsche Post board member responsible for DHL Express in the Americas, Asia Pacific and Emerging Markets, told Reuters he expected the U.S. unit to be profitable by 2009.</p><p>Asked if DHL Express in the U.S. would contribute to the group's EBIT target of at least 5 billion euros ($6 billion) by 2009, Mullen said: "I certainly hope so".</p><p>"There is no more major restructuring to come," he said. "By this summer we expect to see revenue back in positive growth."</p><p></p><p>ASIA GROWTH</p><p>Operating profit at the DHL Express division worldwide is expected to rise to 445 million euros this year, driven especially by growth in Asia, from 11 million last year when Post took a 434 million euro goodwill impairment charge for the U.S. business.</p><p>Deutsche Post's DHL Logistics division is expected to raise operating profit to around 500 million euros this year from 315 million in 2005, boosted by the 3.8 billion pound ($6.6 billion) purchase of UK firm Exel late last year and including integration costs and cost savings.</p><p>No large acquisitions were planned in 2006, Zumwinkel said.</p><p>But these EBIT rises will be distorted when compared with last year, when Post had a one-time gain from a cut in its obligation to fund future shortfalls in civil service health insurance.</p><p>Deutsche Post also said on Tuesday it expects group sales to grow by more than a third to over 60 billion euros in 2006, but the problems at DHL Express in the United States and the cost of integrating Exel into its DHL Logistics unit meant the gain in revenues would not translate into a similar EBIT rise.</p><p>"(The forecasts) are tied to somewhat higher risks this time, unlike in previous years," said LRP analyst Per-Ola Hellgren, adding that the 2006 EBIT figure could come in as low as 3.5 billion euros because of integration risks.</p><p>Deutsche Post finance chief Edgar Ernst told Reuters he would not give a net profit forecast for the year as the company was focusing on the EBIT target.</p><p>Operating profit at Post's key mail business was expected to remain stable at around 2 billion euros in 2006. Sales were also seen stable or slightly higher.</p><p>The company also announced a new programme on Tuesday, dubbed "First Choice", to improve quality in order to help it reach its 2009 earnings target.</p><p>Post added that it would propose a 2005 dividend of 0.70 euros per share, up from 0.50 euros for 2004.</p><p>Deutsche Post shares trade at 11.5 times estimated 2006 earnings, according to Reuters Analytics, compared with around 19.5 at UPS and FedEx and almost 14 at Dutch mail firm TNT NV . (Additional reporting by Matthias Inverardi)</p></blockquote><p></p>
[QUOTE="moreluck, post: 82845, member: 1246"] BONN, Germany, March 14 (Reuters) - German mail and logistics group Deutsche Post expects further losses at its express courier unit in the United States and forecast flat group operating profit in 2006, sending its shares down sharply. Deutsche Post said on Tuesday group earnings before interest and tax (EBIT) in 2006 will be at least 3.7 billion euros ($4.4 billion), compared with 3.76 billion in 2005. It repeated it expects EBIT to be at least 5 billion euros by 2009. DHL Express was expected to make a strong improvement in the United States in 2007, but Post Chief Executive Klaus Zumwinkel told a news conference he did not expect it to post a profit that year. "Further action is needed for the express business in the USA. We need to eliminate the problems we have identified," Zumwinkel said. Post last month abandoned a target to break even at DHL Express Americas in the fourth quarter of 2006. Shares in Deutsche Post were 5.7 percent lower at 21.42 euros by 1331 GMT, making them the worst performers in the German blue-chip DAX <.GDAXI> index. They touched a low of 21.01 euros, their lowest since early January. Deutsche Post is expanding its DHL express and logistics businesses as well as extending its mail activities abroad to reduce dependency on the German postal market, where its monopoly is due to run out at the end of 2007. The mail division still contributes the majority of earnings. But DHL Express is struggling with losses in the United States following the purchase of Airborne Express in 2003, as it expands to take on dominant U.S. rivals United Parcel Service Inc. and FedEx Corp. in their home markets. John Mullen, the Deutsche Post board member responsible for DHL Express in the Americas, Asia Pacific and Emerging Markets, told Reuters he expected the U.S. unit to be profitable by 2009. Asked if DHL Express in the U.S. would contribute to the group's EBIT target of at least 5 billion euros ($6 billion) by 2009, Mullen said: "I certainly hope so". "There is no more major restructuring to come," he said. "By this summer we expect to see revenue back in positive growth." ASIA GROWTH Operating profit at the DHL Express division worldwide is expected to rise to 445 million euros this year, driven especially by growth in Asia, from 11 million last year when Post took a 434 million euro goodwill impairment charge for the U.S. business. Deutsche Post's DHL Logistics division is expected to raise operating profit to around 500 million euros this year from 315 million in 2005, boosted by the 3.8 billion pound ($6.6 billion) purchase of UK firm Exel late last year and including integration costs and cost savings. No large acquisitions were planned in 2006, Zumwinkel said. But these EBIT rises will be distorted when compared with last year, when Post had a one-time gain from a cut in its obligation to fund future shortfalls in civil service health insurance. Deutsche Post also said on Tuesday it expects group sales to grow by more than a third to over 60 billion euros in 2006, but the problems at DHL Express in the United States and the cost of integrating Exel into its DHL Logistics unit meant the gain in revenues would not translate into a similar EBIT rise. "(The forecasts) are tied to somewhat higher risks this time, unlike in previous years," said LRP analyst Per-Ola Hellgren, adding that the 2006 EBIT figure could come in as low as 3.5 billion euros because of integration risks. Deutsche Post finance chief Edgar Ernst told Reuters he would not give a net profit forecast for the year as the company was focusing on the EBIT target. Operating profit at Post's key mail business was expected to remain stable at around 2 billion euros in 2006. Sales were also seen stable or slightly higher. The company also announced a new programme on Tuesday, dubbed "First Choice", to improve quality in order to help it reach its 2009 earnings target. Post added that it would propose a 2005 dividend of 0.70 euros per share, up from 0.50 euros for 2004. Deutsche Post shares trade at 11.5 times estimated 2006 earnings, according to Reuters Analytics, compared with around 19.5 at UPS and FedEx and almost 14 at Dutch mail firm TNT NV . (Additional reporting by Matthias Inverardi) [/QUOTE]
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