Deutsche Post: “Global trading environment deteriorates markedly”
Deutsche Post World Net said today it is adjusting full year earnings guidance downward as the global trading environment has deteriorated markedly.“The third quarter was a challenging quarter and we expect the overall environment to remain so in the near future. Given the uncertain growth prospects as a result of the global financial crisis and weakening world economy, we prefer to be cautious with our outlook,” Chief Financial Officer John Allan said.
The company said it now expects underlying earnings before interest and taxes (EBIT) for 2008 of around 2.4 billion euros ($3 billion), some 10 percent below last year’s result and 17 percent below the previous guidance.
“Deutsche Post World Net now expects world economic growth to continue to slow or even turn into a recession in some developed markets, which is likely to materially impact business prospects in 2009,” it said.
It offered a preview of its third quarter results, saying its mail corporate division in the third quarter saw EBIT “somewhat down compared to the year-earlier period and its express corporate division seeing “overall underlying EBIT in the third quarter declining by 30 million euros year over year. The result was heavily influenced by the ongoing deterioration in the U.S. Express business.”
In its forwarding business “air-freight volumes weakened in the third quarter, whereas volumes in ocean freight grew by a double-digit percentage. As a result forwarding/freight continued to generate double-digit earnings growth in the third quarter,” it said.
Its supply chain business “maintained profit growth in the period, with particularly good progress made in terms of new contract wins.”
