Deutsche Post’s express arm sees bigger losses

Deutsche Post’s express arm sees bigger losses    Deutsche Post, Germany’s mail-to-logistics giant, suffered a 23 percent fall in net income to 169 million euros ($217 million) in the third quarter, as losses in its fast-growing express parcel business DHL widened.
   Operating losses in express activities doubled to 53 million euros ($68 million) in the latest quarter, from 24 million euros a year ago. Deutsche Post does not publish the net income of its express and other divisions. Express revenues rose 23 percent to 4.3 billion ($5.5 billion) from 3.5 billion in the third quarter of 2003.
   Deutsche Port cited acquisitions made in the express division, which included the takeover of Airborne Inc. in 2003. The group said its operating results for the first nine months in the Americas region were burdened by increased expenditures for marketing and infrastructure in the United States.
   The increased losses amount at least to a temporary setback for DHL, which is in the midst of a major expansion of its express delivery network in the United States, and has pledged to take on UPS and FedEx.
   Revenue from all Deutsche Post activities in the Americas climbed 132 percent to 1.8 billion euros ($2.3 billion) in the third quarter from 758 million euros a year earlier.
   Worldwide group revenue at Deutsche Post rose 10 percent year-on-year to 10.7 billion ($13.7 billion) in the latest quarter.
   Improved operating results in the financial services division of Deutsche Post and in its logistics activities largely offset a decline in mail and express results in the third quarter. Group operating income after amortization but before financial costs was slightly lower at 484 million euros ($621 million) in the third quarter, from 491 million euros in the same quarter of 2003.
   The logistics division, which includes DHL Danzas Air & Ocean and DHL Solutions, raised its third-quarter operating income 63 percent to 57 million euros ($73 million) and its revenues 12 percent to 1.7 billion euros ($2.2 billion).
   For the first nine months of this year, Deutsche Post’s group revenue rose 10 percent to 31.7 billion euros ($40.7 billion) from 28.9 billion euros in the same period of 2003. Group operating income after amortization rose 8 percent to 2 billion euros ($2.5 billion) and net income went up 2 percent to 890 million euros ($1.1 billion).
   Over the same nine-month period, Deutsche Post's express division reported an operating loss of 46 million euros ($59 million), whereas it had lost 6 million euros in the first nine months of 2003. Express revenues in the latest nine-month period rose 26 percent to 12.9 billion euros ($16.5 billion).
   The group's logistics division posted an 84-percent increase in operating income to 123 million euros ($158 million) in the first nine months. Logistics revenues increased 14 percent to 4.8 billion euros ($6.2 billion).
   Deutsche Post expects the positive trend in logistics to continue for the rest of 2004
   The management board of Deutsche Post will recommend a 14 percent increase in dividend for 2004.
   Deutsche Post confirmed its full-year earnings forecast. Group profit before goodwill amortization and interest is expected to increase 7.5 percent to 12.5 percent this year and reach “at least 3.6 billion euros” ($4.6 billion) in 2005, Deutsche Post said.
   In the express division, profit before goodwill amortization and interest “is forecast to decline by some 20 percent due to the additional expenditures in the U.S.,” it added.