Profits rose by almost 36 per cent at DHL Supply Chain in the third quarter, according to figures from Deutsche Post DHL.
The division has been going through an optimisation programme designed to increase operating margin to between four and five per cent by 2020 and this work is reflected in the rise in EBIT to €137 million – a 35.6 per cent increase on the third quarter of last year.
Revenue in the Supply Chain division decreased by 14.7 per cent to €3.4bn in the third quarter because of negative currency effects, lower fuel surcharges and the effect of the change in revenue recognition in the contract with the National Health Service.
Allowing for those changes, revenue increased by 2.3 per cent over the previous year. In the third quarter, the division signed additional contracts worth €306m with both new and existing customers.
Deutsche Post DHL group revenue fell by 4.5 per cent to €41.9bn in the first nine months of 2016 – again mainly as a result of currency, fuel and NHS revenue recognition.
Operating profit at Deutsche Post DHL Group rose by 63.7 per cent to €2.4bn from January to September.
CEO Frank Appel said: “We are well on track to reaching the ambitious goals we have set for 2016 and beyond.”
“The strong trend in operating profit in all four divisions shows that we have set the right priorities with our Strategy 2020. We are taking an increasingly active role in the dynamic development of e-commerce all over the world and are continuing to invest in this segment. Thanks to the targeted investments and strategic initiatives we implemented in prior years, we are now enjoying success despite weak economic tailwind.”
Post – eCommerce – Parcel: Revenue increased by 4.0 per cent to €4bn in the third quarter, while EBIT doubled to €295m.The group has also been expanding its parcel network via partnerships with postal companies in Hungary and Slovenia, which brings the number of European countries in which the Group is active to 18. Deutsche Post DHL Group will continue to advance its expansion in the United Kingdom, Europe’s biggest e-commerce market, through the planned acquisition of UK Mail.
Express: Revenue rose by 2.9 per cent to €3.4bn in the third quarter but EBIT was down by 7.7 per cent to €336m.
Global Forwarding, Freight: Revenue decreased by 6.3 per cent to €3.4bn in the third quarter however the business produced a €63m profit for the quarter – it lost €337m in the third quarter of 2015. The group said this was an indication of the success of the measures initiated last year to improve operating performance.