DHL Global Forwarding bounces back

Deutsche Post-DHL reported fourth-quarter net income up 4.7% y-o-y to €670 million, as total revenue was almost flat (down 0.2%) at €15.34 billion. Operating profit for the quarter was up 5.7% to €957 million.

If there was a highlight in the quarter, it was the beginning of a turnaround in the company’s troubled Global Forwarding, Freight business segment. After two years of declining performance DP-DHL abandoned its “New Forwarding Environment” initiative, a move which led it to take a €336 million charge in the third quarter. The turnaround plan, with direct leadership from company CEO Frank Appel, appears to have begun to have an effect, and in the fourth quarter the Global Forwarding, Freight segment reported its first increase in operating profit (up almost 40% to €99 million) since 2013.

This improvement came despite declining revenue and volumes. Air freight forwarding was hit particularly hard, with fourth-quarter volume down 11.8% to 948,000 tonnes and revenue down 11.6% to €1.25 billion. Ocean forwarding fared somewhat better – or at least, less badly – with volume down 1.2% to 722,000 TEUs and revenue down 4.9% to €882 million.

Concerning the DHL Express segment, the company commented on continued strong performance — and most of the numbers in the chart at right confirm that — but we note that fourth-quarter operating income was down 8.3% to €319 million. DP-DHL provided no detail about what caused the drop.