Forwarding plays part in record Deutsche Post results

DHL Global Forwarding, Freight , made a significant contribution to a record performance by Deutsche Post DHL Group in 2022 in terms of revenue and operating profit. Despite a relatively weak end-of-year peak season, the division achieved “a significant jump” in fiscal year turnover and earnings thanks to operational improvements and high freight rates, the German logistics giant said Thursday in its earnings report. EBIT increased to €2.3 billion ($ 2.43 billion) compared with $1.38 billion a year earlier. DHL Global Forwarding, Freight (DGFF) FY revenue also rose sharply to $32 billion from $24.1 billion a year earlier. Deutsche Post DHL (DP DHL) highlighted the volatility of the global forwarding market in 2022 with volume slowing during the year in line with the less positive macro-environment, which was influenced by the war in Ukraine, pandemic-related lockdowns in Asia and high inflation. Additionally, with capacity recovery in air and ocean freight, prices declined quickly in the second half of the year. Air freight revenues, gross profits Revenue from air freight totaled $11 billion, up 18.7%, but volumes were down 9.3% year over year, at 1.9 million tonnes, due to lower demand and a shift to ocean freight. The decline was seen primarily on trade lanes between China and the U.S. as well as between China and Europe. Nevertheless, the gross profit to EBIT conversion ratio from forwarding made impressive reading, increasing in 2022 to 43.7% compared with 35% in 2021, 20% in 2020 and 16.6% in 2019. Results for Q4 portray a far less rosy picture than that for 2022 as a whole and reflect a deepening global economic downturn and COVID-19-related disruption in China. Revenue from air freight was down 22.8% during the corresponding period the previous year to $2.3 billion, and volume decreased 20% to 449,000 tonnes. Volume also was down 10% when compared with Q4 2019, before the pandemic. DGFF’s Q4 2022 EBIT was flat at $425.4 million. Express EBIT down, revenue up DP DHL’s Express division, which relies on air capacity heavily, saw a 4.6% YoY drop in FY EBIT to $4.2 billion, mainly due to higher costs and negative exchange rate effects. Revenue increased to $29.2 billion compared with $25.6 billion, behind pricing measures, exchange rate effects and increased fuel surcharges. The increase in average weight per shipment also had a positive impact on revenue development, while revenue growth was slowed by a decline in international time-definite express shipments. Nevertheless, network capacities were utilized efficiently during the year thanks to high flexibility, DP DHL added. Group CFO cautions prudent H1 The group’s FY EBIT was up 6% at $8.9 billion on revenue of $99.9 billion. “We have once again demonstrated our group’s capability of surmounting challenging environments and look ahead in the best shape ever,” DP DHL Chief Executive Frank Appel said. Considering the continuing uncertainty about the course of an economic recovery, the group’s 2023 EBIT guidance contains three scenarios and ranges from $6.4 billion to $7.4 billion. “The slowing macroeconomic growth momentum is reflected in our EBIT outlook. That is why we are acting particularly prudent in the first half of 2023 and focusing on our yield and cost management,” said DP DHL Chief Financial Officer Melanie Kreis.

Forwarding plays part in record Deutsche Post results

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