May 12, 2020 / 5:27 AM / 23 days ago

Deutsche Post says Europe business returning to normal

BERLIN (Reuters) - German logistics group Deutsche Post AG (DPWGn.DE) said on Tuesday it sees signs that business is normalising in Europe, but the coronavirus crisis continued to weigh in April after dragging down first-quarter earnings.

FILE PHOTO: 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

Deutsche Post DHL, one of the world’s biggest post and freight companies, said the pandemic depressed global freight volumes in the first quarter but boosted parcel shipments as consumers confined to their homes shopped more online.

The Bonn-based company said it had seen express shipments in Europe recover in April after a dip in March, while parcel volumes, which soared to levels usually seen before Christmas in early April, moderated in the second half of the month.

“Fundamentally the trend towards e-commerce will speed up,” Chief Executive Frank Appel told journalists.

Deutsche Post’s shares, which are down by a fifth this year, were up 2.5% at 0720 GMT, the biggest gainer on the German blue-chip index.

Appel said the company had been able to compensate for the drop in global freight volumes through higher margins in air freight, helped by the fact it has its own fleet of aircraft as capacity is limited with most passenger planes grounded.

Express deliveries have also picked up strongly in China since March, with growth stabilising in April, according to a presentation slide.

Deutsche Post expects a negative effect from the pandemic on its results in April, finance chief Melanie Kreis said, but declined to give a figure.

First-quarter group revenue rose 0.9% to 15.5 billion euros ($16.77 billion), while operating profit almost halved to 592 million, including a 210 million hit due to the pandemic, confirming preliminary figures it published last month.

Deutsche Post said it could still not give full-year guidance for 2020, but confirmed its medium-term forecast for operating profit of at least 5.3 billion euros by 2022.

Reporting by Emma Thomasson; Editing by Riham Alkousaa, Kirsten Donovan

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