Tuesday, March 5, 2013

Express Freight and Logistics Group Makes Profits - But Not Everybody is So Happy

DP DHL Publishes Annual Figures Whilst Undercurrent of Unrest Continues
Shipping News Feature

GERMANY – WORLDWIDE – Logistics goliath Deutsche Post DHL, today reflected on its financial position and announced a dividend per share of €0.70 and a prediction of further earnings growth in the future. With operating earnings in 2012 of €2.67 billion there is a note of satisfaction in the tone of the latest press release as the express freight company published its annual position. In some quarters however there was continued dissatisfaction as to the treatment of some staff outside of the group’s native land.

Much of the year’s growth, which matched company predictions, was due to the upsurge of activity in the Asian markets and whilst the postal side still contributes overall, particularly with the increase in online retailing worldwide, the German group now generates over 70% of its revenues overseas.

The operating earnings were up over 9% from 2011 and group consolidated net profit climbed by about €500 million to €1.66 billion in 2012. For next year the predictions are that earnings will continue to rise, €2.7 - €2.95 billion predicted, with profits growing by an equivalent margin whilst additionally the company expects to further increase cash generation and, as a result, to generate sufficient free cash flow to at least cover this year's dividend payment for 2012 which will be formally proposed at the group AGM on 29 May. It is noted that much of the company’s stability in 2012 was due to favourable exchange rates with overall group revenues increasing to €55.5 billion, a 5.1% increase.

Whilst Deutsche Post DHL showed increases across most of its various divisions, revenues up 9.3% to €12.8 billion in express freight, 3.6% to € 15.7 billion in global forwarding and 8.4% to €14.3 billion meanwhile mail services flattened out with traditional post levels falling whilst online marketing boosted parcels resulting in revenues of €14 billion.

Principal outgoings were to DHL which saw purchases to produce a more efficient aircraft fleet, the ongoing expansion of the divisions' networks, state-of-the-art warehouses and a new IT infrastructure for Global Forwarding and negative cash flow expenditure which dropped from the €2.4 billion generated in 2011 to an outgoing of €203 million in 2012, an enormous drop which the group says was due mostly to the near €2 billion it says it used to fund pensions in Q4 last year. Commenting on the figures Frank Appel, CEO of Deutsche Post DHL, said:

"With our strong performance in 2012, we have reached another milestone in our Strategy 2015. In the past year, we made major progress on a journey that was, at times, far from easy. And we delivered on our promises - for the benefit of our customers, employees and shareholders."

One group who wished to comment on the publication of the figures was the International Transport Workers Federation (ITF) which has heavily criticised DHL for its industrial relations practices and who have accused Mr Appel of not delivering on his promises to investigate accusations of unfair treatment of its workers in the past . Speaking to the Handy Shipping Guide, Alen Clifford, ITF DHL campaign coordinator, said:

"We're genuinely pleased to see DHL doing well. We'd be even more pleased if we thought that the company was sharing its success equally among its workers. Sadly the opposite is the case, especially in countries like Turkey, where employees are experiencing abuse and sackings. The day DHL cleans up its act is the day when it will really be able to celebrate. Till then we'll be publicly exposing its wrongdoings."

Photo: Frank Appel