Deutsche Post World Net reports strong first half 2004
Second-quarter operating profit rises 45.2 percent
- EBITA rises by 14.5 percent to 1.7 billion euros in the first half-year
- First-half revenue up 9.6 percent to 21 billion euros
- EBITA to increase by 7.5 to 12.5 percent in full-year 2004
- STAR program contributes 178 million euros to first-half earnings
Deutsche Post World Net reported a strong first half: Profit fromoperating activities (EBITA) rose by 14.5 percent to 1.682 billioneuros from 1.469 billion euros in the year-earlier period. Consolidatednet profit rose 10.9 percent to 721 million euros. Earnings per shareincreased to 0.65 euros from 0.58 euros. Second-quarter EBITA increasedby 45.2 percent to 752 million euros, while second-quarter net profitnearly doubled to 280 million euros.
Deutsche Post World Netgroup revenue rose by 9.6 percent to about 21 billion euros in thefirst half-year of 2004 from 19.2 billion euros in the year-earlierperiod. Revenue grew by 11.6 percent to 10.5 billion euros in thesecond quarter. The share of revenue generated outside of Germany roseby some 27 percent in the first half to about 9.9 billion euros,comprising nearly 47 percent of total group revenue.
"We arevery satisfied with our earnings performance this year, particularlythe increases we were able to register in the second quarter," saidKlaus Zumwinkel, Chairman of the Management Board. "Ourinternationalization strategy is beginning to contribute handsomely toour overall results and we are competing vigorously throughout theworld."
The STAR value creation and integration programcontributed 178 million euros to earnings in the first half of 2004.Individual STAR successes included an increased automation rate in themail centers in Germany as well as the progressive reduction of ITcosts within the group. Since STAR began in November 2002, it hascontributed 601 million euros to earnings. STAR is expected tocontribute at least 1.4 billion euros to earnings by the end of 2005.
Aftera review of the corporation's first-half performance, Zumwinkelincreased the earnings forecast for the full year: EBITA is nowexpected to rise by 7.5 to 12.5 percent. (Previous forecast: between 5and 10 percent). This upward revision results from the about 75 millioneuros worth of net proceeds from the Postbank listing. Looking forwardto 2005, the company expects EBITA to reach at least 3.6 billion euros.
MAIL Corporate Division
The MAIL Corporate Divisionreported strong growth in the second quarter of 2004 with operatingearnings improving by nearly 15.1 percent, driven by the "DirectMarketing" and "International Mail Business" segments.
Revenuein the MAIL division reached 6.29 billion euros in the first half, up1.5 percent. EBITA rose to 1.168 billion euros from 1.162 billion eurosin the first half.
Deutsche Post World net continued tostrengthen its MAIL business in the first half with acquisitions in theU.K. (SpeedMail) and the U.S. (SmartMail).
EXPRESS Corporate Division
EXPRESSrevenue rose 26.3 percent to about 8.7 billion euros during thereporting period, with EBITA up 35 percent to 139 million euros.Airborne Express, which was acquired in Aug. 2003, was included in theresults for the first time. The strongest revenue growth thus occurredin the Americas, where the Group is integrating the Airborne networkinto DHL.
Over the next few years, Deutsche Post World Net willbe investing $1.2 billion in U.S. projects including 12 regionalsorting centers and the bundling of air transport hubs. These measureslay the groundwork for strengthening DHL's infrastructure in the U.S.,reducing transit times and increasing competitiveness. Deutsche PostWorld Net reiterated it expects DHL Americas to break even in 2005.
TheEXPRESS Corporate Division also saw pleasing revenue growth in Asia(+19.7 percent in the first half-year) and Europe (+8.4 percent).
LOGISTICS Corporate Division
Theupward trend continued for the LOGISTICS Corporate Division throughoutthe first half. Divisional sales increased by 14.9 percent to about 3.2billion euros. EBITA rose by more than 50 percent to 116 million euros.The "DHL Danzas Air & Ocean" segment had a particularly strongfirst half. The international sea- and airfreight business generatedstrong growth momentum in the reporting period.
FINANCIAL SERVICES Corporate Division
EBITAin the FINANCIAL SERVICES Corporate Division rose by 44.3 percent to329 million euros from 228 million euros in the first half of 2003."We're very pleased with the development in financial services in thefirst half," said Zumwinkel. "Not only did we conclude a successfulIPO, we're also very satisfied with the operating results."
Postbank will report its results separately on August 9, 2004.
DeutschePost World Net generated proceeds of some 2.6 billion euros fromselling shares in Postbank and issuing a bond exchangeable intoPostbank shares. "The proceeds from the initial public offering will beused to reduce pension obligations in particular as well as net debtand to broaden the base of our business," said Chief Financial OfficerEdgar Ernst.
EBITA for the MAIL Corporate Division is expectedto remain unchanged this year. The EXPRESS Corporate Division forecastsan increase in EBITA by at least 20 percent compared to the previousyear's reported value. The outlook for the LOGISTICS Corporate Divisionis optimistic, with an expected EBITA increase of at least 10 percent.The group forecasts an increase in EBITA of at least 15 percent for theFINANCIAL SERVICES Corporate Division for the full year 2004.
DeutschePost World Net is increasing its earnings guidance for the full year2004. The group now expects EBITA to increase by 7.5 percent and 12.5percent compared to 2003. Previously, it forecast growth of between 5percent and 10 percent. In 2005, EBITA is expected to reach at least3.6 billion euros.