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Deutsche Post expects online shopping to deliver profit growth
March 8, 2017 / 6:38 AM / 6 months ago

Deutsche Post expects online shopping to deliver profit growth

The logo of German postal and logistics group Deutsche Post DHL is seen on the delivery car "Street Scooter" in Aachen, Germany, August 23, 2016. REUTERS/Thilo Schmuelgen

BERLIN (Reuters) - German postal and logistics company Deutsche Post DHL (DPWGn.DE) expects demand for parcel deliveries from online shopping to drive another rise in profit this year after the company met forecasts for 2016.

Deutsche Post DHL is expanding its parcel network across Europe, after buying a stake in Relais Colis in France and acquiring UK Mail in Britain, and has repeatedly shrugged off moves by customer Amazon.com (AMZN.O) to invest in its own delivery capabilities..

Europe’s biggest postal group, which is also trialling new ways of delivery, said on Wednesday it delivered a record 1.2 billion parcels in Germany last year, a 9.2 percent increase on 2015, taking its market share to 45 percent from 43.7 percent.

“We expect to maintain this positive momentum in 2017 and the coming years and are therefore continuously investing in the expansion of our capacity,” Chief Executive Frank Appel said.

Appel also said in a statement that the group was ready to deal with any trade barriers put up as a result of nationalist policies that could make it difficult for companies to conduct cross-border business.

“We are observing this closely, of course, but we are not unduly alarmed. Our experts know exactly how to deal with trade barriers,” he said.

Deutsche Post DHL posted earnings before interest and tax (EBIT) of 3.49 billion euros ($3.69 billion) for 2016, in line with analysts’ expectations, and said it expected that to rise to around 3.75 billion euros this year.

Around 1.5 billion euros of the 2017 EBIT is due to come from the post, e-Commerce and parcel division.

Deutsche Post shares, which have gained 42 percent over the last year, were indicated down 1 percent, the second-biggest decliner in the German blue-chip index .GDAXI, which was expected to open 0.3 percent lower.

The group proposed a dividend of 1.05 euros a share for 2016, compared with 0.85 euros for 2015 and above expectations of 1.00 euro a share.

Analysts expect it to increase revenues to 59.5 billion and profit to 3.79 billion euros this year.

($1 = 0.9469 euros)

Editing by Georgina Prodhan and Alexander Smith

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