Posting losses
July 23, 2009
Deutsche Post said the decline to 66 million euros ($94 million) from last year's 231 million euros was a direct result of fewer sales and the bankruptcy of department store operator Arcandor. Deutsche Post worked closely with Arcandor in terms of providing deliveries for its mail order businesses and felt the effects of the company's accumulated 15-million-euro debt.
However, the second-quarter results came as a positive jolt to analysts who had estimated net losses of 110 million euros.
In the second-quarter term, April to June, Deutsche Post saw sales dive 17.7 percent to 11.1 billion euros compared to the 13.3 billion euros that were observed a year ago.
Quarter on quarter figures also took analysts by surprise. They had forecast a drastic fall in earnings before interest and taxes (EBIT) to 202 million euros in a Reuters poll. Post only reported falls of 37.8 percent and came out with 257 million euros EBIT.
The better-than expected results were credited to 413 million euros in cost cuts in the first quarter that had previously left the industry with a desolate outlook.
Light at the end of the tunnel?
Still, Deutsche Post is still expected to turn a net profit this year due to cash it accumulated from the sale of its banking division, Deutsche Postbank. The company said it was optimistic and forecast a 1.2-billion-euro windfall this year.
Deutsche Post is not the only hurting delivery company, with shippers around the world feeling the effects of sluggish consumer spending and a decline in business investment. The World Trade Organization went so far as to predict that global trade volume would dive nine percent - the steepest fall since World War II.
Deutsche Post's US competition, FedEx, had also expressed concern over the coming quarters, especially in view of the recession and climbing fuel prices.
Investors have also voiced their concern about Deutsche Post lagging behind its US rivals, when the world's largest package delivery company, UPS, announced high expectations for upcoming quarterly earnings.
While the cyclical downturn has dampened spirits at Deutsche Post, the Bonn-based company said although the recovery won't be speedy, it is in sight.
mo/Reuters/AP/dpa
Editor: Neil King