Frankfurt-270515 Hauptversammlung Deutsche Post dhl, Frankfurt am Main, Jahrhunderthalle Deutsche Post dhl/Bernd Georg
Deutsche Post-dhl Chief Executive Frank Appel issued a thinly veiled warning to rivals that it would seek to capitalize on the projected decline in transaction volumes to gain market share.
At the company’s third-quarter results presentation in Bonn today, which saw group revenues hit 24 billion euros and EBIT 2 billion euros in the third quarter, Mr Appel was asked repeatedly about the volume outlook for the coming quarters.
“A crisis is a time when the strong have the upper hand and we will be stronger than our future competitors,” he told analysts.
For an in-depth look at DP-dhl‘s Q3 figures and what’s next, check out Loadstar Premium.
Despite mounting evidence of a prolonged slump in DP-dhl‘s global freight business, the freight division’s EBIT and revenues rose again sharply and continued to be the group’s largest segment by revenue.
EBIT at the end of the third quarter rose 57% year-on-year to 584 million euros on continued strong revenue, with revenue up 38.2% to 7.9 billion euros, mainly due to “continued high freight rates”.
Air cargo volumes fell 11% year-on-year to 467,000 tonnes, but were still up 3% from the same period in 2019. The decline compared to the same period in 2021 was mainly due to weakness on the transpacific route, the company said.
“Our airfreight volumes in Q3 2022 were down 10.9%, mainly on the trade lane between China and the US, due to lower demand and a shift to ocean freight.
“At the same time, freight rates remained high, leading to a 22.6% increase in air freight revenue compared to the previous year.
“[Air freight] Gross profit increased by 54.6% due to factors such as continued strong demand for charter flights,” the company explained in its results presentation.
In ocean freight, Deutsche Post’s takeover of JF Hillebrand boosted what should have been much weaker volumes.
“Ocean volumes in Q3 2022 were up 11.9% year-on-year. Excluding the Hillebrand acquisition, the figure was down 8.9% from a year earlier, mainly due to fewer trade lanes from China.
“Capacity conditions in the ocean freight market have eased. Overall, freight rates remain high, although the expected normalization has begun,” the company said.
It added that ocean freight revenues in the third quarter of 2022 rose 67.2% year-over-year, and 40.4% excluding Hillebrand.
Gross profit rose 43% in the quarter, and the EBIT margin increased to 7.4%, up from 6.5% a year earlier.
Revenue at its contract logistics unit dhl Supply Chain rose 14.5 percent to 4.2 billion euros, while earnings before interest and taxes soared 54.9 percent to 220 million euros.
“This development is particularly pronounced in the Americas region,” it commented. “Electronic fulfillment solutions in particular are attracting increasing interest.
“All sectors posted double-digit growth rates, with the consumer and automotive sectors seeing the most significant growth.
“Revenue growth was also based on new business and contract renewals as well as e-fulfillment and omni-channel solutions, among others,” it added.
During the quarter, it won new contracts from new and existing customers worth 385 million euros in annual revenue, which equates to a total contract value of 1.8 billion euros.
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