Exel takeover boosts Deutsche Post’s logistics profits

Exel takeover boosts Deutsche Post’s logistics profits    Deutsche Post World Net’s acquisition of U.K. logistics company Exel helped raise its logistics division’s earnings before interest and tax (EBIT) 133 percent in the first quarter to 154 million euros ($198 million).
   In the first quarter 2005, the logistics division posted EBIT of 66 million euros ($85 million).
   Revenue for the logistics unit surpassed that of Deutsche Post’s mail and express divisions for the first time, reaching 4.96 billion euros ($6.4 billion), up 197 percent from 1.67 billion euros in the first quarter 2005.
   This is the first quarter that Exel’s results have contributed to Deutsche Post results since the German conglomerate paid 5.6 billion euros ($7.2 billion) for Exel in December. The enlarged logistics unit now operates under the DHL brand with two logistics brand areas: DHL Exel Supply Chain and DHL Global Forwarding.
   “Just a few days ago, we were able to present our shareholders with a record result for the past fiscal year, and we have entered the new year on a positive note as well. The additional impulse from the acquisition of Exel had a particularly positive impact,” said Edgar Ernst, Deutsche Post’s chief financial officer. “In terms of revenue and employees, logistics is now the group’s biggest corporate division.”
   The mail division posted EBIT of 674 million euros ($865 million) up 4.8 percent over the same quarter last year, with revenue up 1.7 percent to 3.31 billion euros ($4.2 billion). “As expected, the international mail business, which is being expanded aggressively under the DHL Global Mail brand, more than offset lower domestic sales, contributing 17 percent to first-quarter sales in the mail division,” Deutsche Post said in a statement.
   Deutsche Post express division’s EBIT slumped 148 percent to a loss of 37 million euros ($47.5 million), contrasted against a profit of 77 million euros last year. Revenue for Deutsche Post’s express sector improved 10 percent to 4.62 billion euros ($5.9 billion). “The deterioration was due solely to the situation in the Americas region, which continued to suffer from quality-related customer and sales losses during the fourth quarter. Although these difficulties have since been eliminated, the financial impact is still being felt,” Deutsche Post said.
   Deutsche Post forecast consolidated EBIT of at least 3.9 billion euros ($5 billion) for the full year 2006 with revenue reaching 60 billion ($77 billion), which compares to 44.6 billion euros posted in 2005.