DHL forwarding arm impacted by ‘further post-pandemic normalization’

DHL Global Forwarding, Freight division followed its major competitors in posting a significant year-over-year decline in operating profit, revenue and freight volumes in the first quarter, with parent Deutsche Post DHL pointing to “ further post-pandemic normalization” to explain the results. EBIT for the division decreased to 389 million euros ($430.1 million) from $664.6 million in Q1 2022, while revenue fell by 25.5% to $6.08 billion — impacted by lower volume and freight rates. Revenue from airfreight specifically was down by 39.6% to $1.88 billion. Volumes decreased by 18.7% to 414,000 tonnes, with the decline particularly noticeable on trade routes between Asia and the United States and between Asia and Europe, the German logistics services giant said. Volume for March was down 17% compared with March 2022. “ While Air and Ocean Freight volumes showed the usual larger cyclical swings, gross profit continued to benefit from the typical timing effect on rates and held up much better than current spot rate movements,” DP DHL said in its earnings release today. “ Hence, we expect gross profit to see further normalization in Q2,” the release said. “While EBIT is down compared to the unusually high levels in 2022, we expect our profit generation to settle at significantly higher levels versus pre-pandemic profitability, driven by our internal efficiency improvements.” Global Forwarding recorded a conversion rate of 35% in Q1. DHL also noted that demand for DHL Express services “proves more resilient than the wider swings in Air and Ocean freight.” DHL Express’ Q1 EBIT decreased by 7.0% to $998.5 million, the temporary effects of fuel surcharges having a positive impact. Revenue , including negative currency effects, decreased by 1.4% to $6.93 billion. Without the negative currency effects, revenue grew 0.4%. Daily time definite international (TDI) shipments fell 5%. ‘Robust start’ for fiscal 2023 Incoming DP DHL Chief Executive Tobias Meyer , who will take over from long-serving CEO Frank Appel tomorrow, said that the group had “ got off to a robust start to the new fiscal year in 2023 in a challenging market environment.” At $1.77 billion, the group’s EBIT was 24.1% lower than in Q1 2022. Revenue totaled $23.11 billion compared with $25 billion a year earlier. In a conference call with analysts that followed the release of the Q1 results, Meyer highlighted DP DHL’s “ very resilient business performance in an unusually inconsistent scenario. “We have some weeks where volumes in certain regions are up. Next week, they are down. The market is really hard to read at present,” he said.

DHL forwarding arm impacted by ‘further post-pandemic normalization’

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