DHL Supply Chain’s revenue fell 5.7 per cent to €13.4 billion in 2018, while operating profit (EBIT) was down 6.3 per cent to €520 million, the annual results from Deutsche Post DHL reveal.
The group said the EBIT decline was attributable to one-time negative effects of €50m from customer contracts and €42m from pension obligations. Adjusted for these factors and the one-off effect resulting from a write-down of customer relationship assets in the previous year’s result, EBIT improved by 4.3 per cent.
The revenue decline was mainly down to the sale of Williams Lea Tag and currency effects, it said. “After adjusting for those factors, revenue for the division increased by 4.3 per cent. DHL Supply Chain continued to generate additional new business, closing additional contracts worth €1.3bn with both new and existing customers in financial year 2018.
The Global Forwarding, Freight division increased EBIT by 48.8 per cent to €442m on revenue up 3.4 per cent at €15bn. The group said this division had focused on growing high margin business.
The DHL Express division continue to perform strongly with a 12.7 per rise in EBIT to €2bn on revenue up 7.3 per cent to €16.1bn.
Restructuring costs in the group’s domestic German mail business, PeP, meant that EBIT fell 56.4 per cent to €656m while revenue was up 1.7 per cent to €18.5bn.
Total group EBIT was down 15.5 per cent for the year at €3.2bn, while revenue was up 1.8 per cent at €61.6bn.
“2018 was a challenging year for Deutsche Post DHL Group, which we closed with a successful Christmas business,” said group chief executive Frank Appel.
“Despite rising geopolitical uncertainties, global trade continued to registerr growth. This benefitted our DHL divisions in particular. In our German post and parcel business, we initiated measures to secure the division’s long-term EBIT growth – and we consciously accept that this comes with a short-term burden on EBIT.
“We have thus created the conditions for reaching our 2020 targets and for continuing to grow profitably in the years thereafter.”
The group expects to increase in operating profit to €3.9 to 4.3bn in 2019 as a result of structural and operating improvements across all its divisions.
DHL Express was the star performer for Deutsche Post DHL last year, but DHL Supply Chain saw a dip in sales and profits following the sale of Williams Lea Tag.