DHL attribute DHL Q1 positive growth to trading in ‘attractive markets’
DHL have attributed DHL Q1 positive revenue and operating profit growth to being “well-positioned in attractive markets.”
DHL increased both revenue and operating profit in the first quarter of 2019 compared to last year’s figures. They saw revenue of €15.4 billion between January and March. That’s up by 4.1% on the year-on-year (YoY) basis. Operating profit was up 28.1% on the YoY rate to €1.2 billion.
DHL puts the first quarter’s success down to their partnership with Chinese delivery company SF Holding, initiated at the end of 2018. The collaboration saw their transactions invested in restructuring the DHL’s supply chain business, mainly in the UK. DHL’s supply chain saw operating profit growth by 12.4% on the YoY rate.
DHL focus on ecommerce solutions
January 2019 saw DHL launching DHL eCommerce Solutions, a newly created division which focuses on delivering last mile ecommerce solutions for small and medium-sized businesses (SMBs). The move signals an increasing focus of DHL to implement new ecommerce solutions to their offering so they can keep abreast of the growth of online services globally. Revenue in the new division grew by 8.9% to date, comprising of €1.0 billion in the first quarter.
Outlook: 2019 and 2020 earnings forecasts
DHL say that the business will see an increase in operating profit to between €3.9 and €4.3 billion in 2019. DHL say that their Post & Parcel Germany division (P&P) is expected to contribute the most to the business growth during this year.
The P&P division is expected to contribute between €1.0 and €1.3 billion to the DHL’s projected operating profit for the current year. DHL expects total operating profit growth of between €3.4 and €3.5 billion. DHL’s operating profit is forecasted to rise to more than €5.0 billion in 2020. The P&P division is expected to contribute more than €1.6 billion and the DHL divisions more than €3.7 billion to that total.
“The first quarter played out as we expected. We achieved growth in all five divisions. This shows that we are very well positioned in attractive markets and that our fundamental growth drivers are intact. E-commerce continues to boom all over the world and although some momentum has been lost, global trade is still on the rise, just as we expected for 2019. We are therefore on track towards our target of generating more than EUR 5 billion in EBIT in the coming year.”
– Frank Appel, chief executive officer, Deutsche Post DHL Group