Frank Appel, CEO of Deutsche Post DHL Group (OTCMKTS: DPSGY), said the German logistics company used its diverse services portfolio to outflank the coronavirus pandemic and significantly increase its second-quarter profit.
The company’s preliminary pretax profit for the quarter increased 16% to 890 million euros ($1 billion), compared to 769 million euros ($868 million) for the same period last year.
“Our fundamental strength and resilience as a group has paid off in recent months,” Appel said in a statement. “With our broad portfolio of leading logistics services, we have the right business model to form the backbone of global trade.”
To reward its employees for their work during COVID-19, Appel said the company has set aside about 200 million euros ($225 million) to cover a one-time pay bonus of 300 euros ($340) per employee worldwide.
DP DHL had earlier warned that its second-quarter profits were in jeopardy due to the coronavirus disrupting global supply chains. Since late March, however, the company has recorded increasing freight volumes in e-commerce orders.
The company said measures such as adjusting its service network and maintaining its own aircraft flight capacity also kept its operations positive.
Broken down by service, Express division profits rose to 560 million euros ($632 million) compared to 521 million euros ($588 million) for the previous-year period, while the German Post and parcel segments generated about 260 million euros ($293 million) in operating income, compared to 177 million euros ($200 million) a year ago.
DP DHL’s global forwarding unit recorded Q2 operating income of 190 million euros ($214 million) compared to 124 million euros ($140 million) during the same period last year.
The pandemic and a restructuring of the DP DHL’s electric cargo bikes unit, however, cut its supply chain earnings to about 30 million euros ($33 million) during the quarter, compared to 87 million euros ($93 million) in the 2019 period. The company’s eCommerce Solutions lost about 30 million euros ($33 million), but it broke even with the 2019 Q2 operating profit of about 18 million euros ($20 million).
The company said its 2020-2022 investment plans remain unchanged at between 8.5 billion euros ($9.6 billion) and 9.5 billion euros ($10.7 billion).
DP DHL will release more detailed Q2 financial results at its Aug. 5 general meeting.
The company said going forward that it will no longer differentiate between adjusted operating results before and after the coronavirus pandemic, saying “this distinction became increasingly artificial and less meaningful during the second quarter.”
In response to a “V-shaped” economic recovery from COVID-19, DP DHL said it anticipates a pretax profit for 2020 of 5.3 billion euros ($5.9 billion).