Deutsche Post DHL Group reported Tuesday higher profit in its third quarter as revenues were benefited mainly from the surge in global e-commerce activities. Further, the logistics company confirmed its recently raised 2020 EBIT guidance, as well as FY22 earnings view, and lifted free cash flow forecast. The company said it is strongly positioned to achieve profitable growth from e-commerce acceleration, across the firm. However, Deutsche Post shares were losing around 6 percent in German trade.
For the full year, the company expects operating profit to reach between 4.1 billion euros and 4.4 billion euros in 2020. This is compared to EBIT of 4.13 billion euros recorded in the prior year.
According to the company, achieving the upper end of the guidance will mainly depend on whether the volume development will allow for an efficient utilization of the networks.
Further, adjusted EBIT for the year is estimated to be 4.71 billion euros to 5.01 billion euros, higher than last year's 4.05 billion euros.
The company now expects free cash flow in 2020 to be more than 2.0 billion euros, higher than previously expected more than EUR 1.8 billion.
The Group continues to expect to invest around 2.9 billion euros for the full year.
Deutsche Post also confirmed its medium-term earnings view updated in July, and continues to expect Group EBIT of between around 4.7 billion euros and more than 5.3 billion euros in 2022, depending on the shape of the macroeconomic recovery.
CFO Melanie Kreis said, "We have not only significantly increased our profitability, but also our cash flow. This is particularly important in the current uncertain economic environment. We are thus very well positioned to continue to invest consistently in profitable growth and the implementation of our Strategy 2025."
For the third quarter, net profit increased 51.7 percent to 851 million euros from 561 million euros a year ago. Earnings per share were 0.67 euros, up 53.3 percent from 0.45 euros last year.
Operating profit or EBIT rose 46.2 percent from the previous year to 1.38 billion euros. The EBIT margin rose to 8.5 percent from 6.1 percent.
Third-quarter Group revenue increased by 4.4 percent to 16.24 billion euros from 15.55 billion euros in the prior year. Organic revenue growth was 9 percent for the quarter with particularly dynamic development in Parcel, Express and eCommerce Solutions businesses.
Revenue in the Post & Parcel Germany division rose 3.4 percent, and Express division increased third-quarter revenue by 14.6 percent.
Revenue in the eCommerce Solutions division climbed 26.1 percent.
In Germany, Deutsche Post shares were trading at 38.10 euros, down 5.93 percent.
For comments and feedback contact: editorial@rttnews.com
