United Parcel Service (UPS), the logistics and distribution company, has closed a complicated 2023 in which revenues and profits fell sharply.
The company had a turnover of 90,958 million dollars (about 83,900 million euros at the current exchange rate), 9.3% less than in 2022, with a drop in both the US business, the international business, and the chain solutions business. of supply.
The profit sank 41.9%, to 6,708 million dollars, according to the accounts communicated by the company this Tuesday to the United States Securities and Exchange Commission (the SEC).
Changes in consumer behavior, who are going more to physical stores to buy, competition with logistics giants like Amazon and the evolution of demand, especially in air cargo from China, have caused a decrease in the UPS business.
The company has also been burdened during 2023 by labor conflicts.
Carol Tomé, CEO of UPS, said in a statement: “2023 was a unique and difficult year and through everything we remained focused on controlling what we could control, we stayed on strategy and strengthened our foundation for growth. future".
Tomé is trying to recover the delivery business the company lost during controversial union negotiations last summer.
She has also focused on increasing efficiency and shifting to more profitable deliveries, such as medical supplies, to offset large pay increases in the first year of a five-year labor agreement that took effect Aug. 1.
The company expects to grow again during fiscal year 2024, according to the forecasts it published this Tuesday.
For the full year 2024, UPS expects revenue to range from approximately $92 billion to $94.5 billion and adjusted consolidated operating margin to range from approximately 10.0% to 10.6%, it said.
The market has reacted downward, punishing UPS's price after the figures were published, which were below expectations.
The company may benefit in its air business from difficulties in shipping due to attacks by Houthi rebels and the drought that limits ship movements through the Panama Canal.
Raise the dividend
Investment forecasts are about $4.5 billion and dividend payments are about $5.4 billion, subject to approval by the board of directors.
Despite falling profits in 2023, UPS's board of directors has approved an increase in the company's quarterly dividend for the 15th consecutive year.
UPS will pay a dividend of $1.63 per share in the first quarter of 2024 to all outstanding Class A and Class B shares. The dividend will be payable on March 8 to shareholders of record on February 20.
In the fourth quarter, revenue was $24,917 million, 7.8% less than in the same period in 2022. Consolidated operating profit was $2,477 million, with a drop of 22.5%.
The net result sank 53.5%, to 1,605 million dollars, after accounting for 512 million extraordinary dollars, of which are for adjustments in the pension plan, 154 million for transformation expenses and 84 million for deterioration of the Coyote trademark.
Over the summer, UPS avoided a strike after negotiating a new agreement with the Teamsters union, which represents about 330,000 of its workers.
The new agreement means higher costs for the company.
The agreement includes wage increases for workers, truck improvements and other conditions.
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