DP-DHL Group’s Q2 operating profit up, despite persistent drop in airfreight volumes
While Deutsche Post-DHL Group reported an increase in its overall revenue and operating profits for the second quarter of 2019, compared with Q218, the company’s Global Forwarding, Freight (GFF) division saw airfreight volumes decline by 5.8% year-over-year for Q2 to 888,000 tonnes. For the first half of 2019 ending June 30, GFF saw a decrease in volumes by 4.9% compared to the same period the year prior, to 1.8 million tonnes.
DP-DHL attributed the decrease in airfreight volume to the current decline in market volumes on key trade lanes. Even with these declines in volumes, the company stated revenue for the division increased by 2.5% y-o-y to €3.8 billion for the quarter and by 3.6% to €7.6 billion for the first half of 2019, thanks to increases in ocean freight and in the Freight business unit, driven mainly by “B2C business in Sweden and less-than-truckload business in the Czech Republic and Poland.”
DP-DHL Group’s revenue saw an increase of 3.0% y-o-y for Q2 to €15.5 billion and an increase of 3.6% y-o-y for H1 to €30.8 billion. Operating profit for the group overall was up 2.9% y-o-y to €769 million for the second quarter of 2019, and up 16.7% for H1 2019, y-o-y, to €1.9 billion.
The Express division reported a 5.0% increase in revenue to €8.2 billion for H1 and a 4.8% increase to €4.2 billion for Q2, although operating profit was down slightly for the first half. Meanwhile, volumes per day were up for both Time Definite International (TDI) and Time Definite Domestic (TDD) products. DP-DHL said the slight operating profit decline was caused by foreign currency losses, portfolio streamlining and “weak growth in shipments at the beginning of the year.”
In DP-DHL’s Supply Chain division, operating profit dropped steeply to €87 million in Q2, which the company said was influenced by the sale of its business in China. However, during the first half overall, operating profit more than tripled, thanks to growth in the Americas region. Revenue for the unit increase by 1.2% for Q2 y-o-y to €3.3 billion and by 2.9% y-o-y for H1 to €6.5 billion.
DHL’s eCommerce Solutions unit saw a 6.2% revenue increase, y-o-y, to €995 million for Q2, which supported the 7.6% y-o-y increase in revenue for the first half of 2019 to just under €2.0 billion. The company attributed declines in EBIT in the division primarily to restructuring expenses “incurred for portfolio optimization, overhead reductions and loss allowances, amongst other things” in a net amount of €51 million.
Despite the currently weak market environment for air cargo, DP-DHL Group said it is maintaining its earnings projections across its divisions. It anticipates its Group EBIT for 2019 to reach between €4.0 billion and €4.3 billion.
