As of: March 6, 2024, 4:34 p.m
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The flags of the DHL Group are dancing in the wind: the logistics group is having to accept a setback after record years.
© Thomas Banneyer / dpa
The German logistics giant DHL has again seen a decline in profits after years of record periods.
The dividend for shareholders remains high.
Bonn - After record years, the logistics giant DHL has to cope with significant declines in sales and profits due to the boom in the Corona crisis.
The new DHL boss Tobias Meyer is still ensnaring the shareholders: Deutsche Post, which has been operating under the name DHL since last year, wants to keep the dividend for 2023 stable at 1.85 euros per share.
In addition, the current share buyback program is to be extended and increased by one billion euros.
For 2024, Meyer expects that “the valley will be reached” - and that things will start to look up again in the second half of the year.
Operating profit (EBIT) is expected to be between 6.0 and 6.6 billion euros.
In the worst case scenario, it could be lower than the previous year.
Meyer also does not want to take over the railway subsidiary DB Schenker.
It doesn't fit DHL.
In the past year, the Bonn DAX group recorded a decline in sales to 81.8 (previous year: 94.4) billion euros and a slump in EBIT to 6.3 (8.4) billion euros.
2023 will therefore be “a step backwards” compared to the previous year - even if DHL is working significantly more profitably than before the pandemic, said CFO Melanie Kreis on Wednesday in Bonn.
The figures and outlook were not well received by investors.
Post shares lost over six percent by the afternoon and were trading at just over 36 euros.
The group had to give up operating profit in 2023, especially in the international freight business and in the letter and parcel business in Germany - in both divisions the decline exceeded the 30 percent mark.
The postal service continues to struggle with declining shipment volumes in the German mail business.
No rapid improvement expected
DHL cannot expect any economic tailwind in the current year: “World trade and also the economy in Germany continue to develop weakly,” complained Meyer.
DHL “does not expect global demand to pick up quickly in the first half of the year.”
However, the group's forecast for 2024 is “significantly above the values of the pre-pandemic year 2019”.
In the medium term, operating profit should improve again: DHL now expects an EBIT of between 7.5 and 8.5 billion euros for 2026.
DHL is not alone in developing the industry.
Compared to the Corona years with the boom in online trading, significantly lower freight rates and sluggish global trade are affecting logistics companies.
They also have to cope with the consequences of Houthi attacks on merchant ships in the Red Sea.
Competitor UPS is cutting jobs
DHL's competitor UPS took action after declining sales and profits and announced it would cut 12,000 jobs.
Kuehne+Nagel also wants to cut jobs.
The group based in Switzerland recorded significant declines and the dividend for 2023 was even cut.
FedEx had slashed its 2023 outlook and announced that it expected falling sales.
However, DHL is not planning any major workforce reduction programs, Meyer made it clear.
Deutsche Post is also facing changes in its mail business in its home market.
The federal government has initiated a reform of the postal law - with far-reaching innovations for the company.
Deutsche Post should be given more time to deliver letters, but at the same time they should reach consumers more reliably.
At the same time, the government wants to ensure more competition in the market and give the Federal Network Agency more powers.
The plans already have one consequence for the post office: They want to forgo night flights in Germany to transport letters - these are no longer necessary given the longer delivery times, said Meyer.
(Reuters, lf)