DHL Boosts Profit 50 Percent

Deutsche Post DHL boosted earnings 50 percent in 2010 from a year ago as the global economic recovery drove strong volume growth and higher freight rates in ocean container, air cargo and express markets.

The German mail and global logistics group earned $3 billion before interest and tax compared with $2 billion in 2009 as revenue jumped 11.4 percent to $71.6 billion from $64.2 billion with lower mail sales more than offset by growth at the DHL logistics unit.

Net profit grew fourfold in 2010 to $3.5 billion, bolstered by the sale of Postbank, a retail bank.

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Traffic volume returned to more normal levels in the fourth quarter from steep increases in the first nine months. But revenue increased 12 percent year-on-year to $19.3 billion, driven by the DHL units, and earnings were 12.7 percent higher at $824 million.

"We positioned ourselves at an early stage to be fit for the economic upswing," said CEO Frank Appel.

The company said it expects to make an operating profit of $3 billion to $3.3 billion in 2011.

"We remain fundamentally optimistic about the economy," Appel said. "But we are not euphoric," he said, warning of possible disruptions from uncertainties in financial markets due to Europe's sovereign debt crisis or unrest in North Africa and the Middle East.

With an operating profit of $2 billion compared with $525 million in 2009, the DHL divisions for the first time contributed more to overall earnings than the mail unit which generated underlying earnings of $1.6 billion compared with $1.95 billion in 2009.

DHL's express unit boosted revenue 12 percent to $15.4 billion, driven by the recovery in the global economy and an "intense" focus on international shipments. Following a restructuring, the U.S. business was "particularly dynamic" with revenue surging 25 percent from a year ago.

The restructuring in the U.S., the UK and France helped to lift express operating profit to $1.09 billion from $327 million in 2009.

The global freight forwarding unit boosted revenue by more than $4 billion, or 27.6 percent, to $19.9 billion on "top line" double digit growth in ocean container and air cargo and higher freight rates.

Ocean container traffic rose to almost 2.8 million 20-foot equivalent units from 2.6 million TEUs in 2009, and air freight totaled 4.43 million metric tons compared with 2.6 million tons a year ago.

Air and ocean forwarding profit rose almost 42 percent to $542 million from $382 million in 2009.

The supply chain unit increased revenue 9.2 percent to $129.4 million and swung to a $561 million profit from a year earlier loss of $183.5 million that was largely due to the collapse of a major German customer.

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.