German transport and logistics giant Deutsche Post DHL Group (OTCUS: DPSGY) reported on Wednesday lower results in its fiscal 2023 first quarter, with revenue of $23.1 billion, down from $24.94 billion in the same period a year ago, operating profit down 24.1% to $1.77 billion and operating margin down to 7.8% from 9.6%.

The marked slowdown in the global economy hit its two largest divisions: DHL Express, the time-definite air operation, and DHL Global Forwarding, the air and ocean freight forwarding division. Revenue in Express declined 1.4% to $6.96 billion, driven by a decline in time-definite volumes. Excluding the tailwind of higher fuel surcharges in the quarter, revenue fell 4.7%.

Revenue in Global Forwarding fell 25.5% to $6.07 billion, as slowing volumes and lower rates took their toll. Air freight forwarding volumes were hit hardest on the trans-Pacific and Asia- to-Europe routes. In ocean freight, lower volume was due to a volume of decline in trade routes from China.

DHL Supply Chain, the world’s largest contract logistics provider, increased revenue by 7.7% to $4.97 billion, with gains posted across the board. 

The full-year EBIT forecast is based on three macro scenarios: In the case of a strong recovery commencing by midyear, earnings before interest and taxes should come in around $7.7 billion. In case of a recovery tilted toward year-end, EBIT will come in at $7.1 billion. In case of no meaningful recovery, EBIT should come in at least at $6.6 billion.

Melanie Kreis, the company’s CFO, said in an internal Q&A that at the start of the year, the company saw business-to-business volumes begin to slow and international markets normalize in the face of weaker demand. 

“At the same time, inflation has weakened consumption and dampened online commerce,” Kreis said.

The post Deutsche Post DHL posts lower fiscal Q1 results appeared first on FreightWaves.

Similar Posts

Leave a Reply