GERMANY's Deutsche Post DHL Group second quarter net profit declined 29.3 per cent to EUR326 million (US$357.4 million), drawn on revenues of EUR14.7 billion, which increased 7.3 per cent year on year.
The company said the drop in profits should be viewed "against the backdrop of the negative impact of the strike in the Post ?e-commerce ?Parcel (PeP) division.
As previously reported, the strike, which focused on the status of the company's parcel delivery agents, was resolved following an agreement between Deutsche Post DHL and the union ver.di on July 5.
Deutsche Post DHL described the deal as a "sustainable wage agreement that lays the foundations for long-term growth in the German parcel business".
Operating earnings at the PeP division contracted by 60.3 per cent to EUR75 million. The company said that this development "principally reflects an impact of EUR100 million from strike activities during the wage negotiations, in addition to further investments in the expansion of the international e-commerce business".
Deutsche Post DHL added that PeP Q2 revenues grew 1.9 per cent to EUR3.7 billion.
As expected, this overall revenue figure breaks down into growth in parcels and e-commerce, and a continuing decline in traditional post.
Quarterly revenues from the e-commerce ?Parcel units were up 12.2 per cent to EUR1.5 billion. The increase was based on revenue gains of 26.3 per cent in e-commerce, 9.3 per cent in Parcel Germany and 8.6 per cent in Parcel Europe.
The company statement said: "This positive development confirms that Deutsche Post DHL Group continues to profit from its strong market position in the dynamically growing e-commerce segment. Through investments in infrastructure and new, innovative offerings, such as Parcel Boxes, the group is continually strengthening this successful position."
In contrast, Q2 revenues in the Post unit fell by 3.8 per cent to EUR2.3 billion.
Developments were less positive in the Global, Forwarding, Freight division where operating profit (EBIT) fell 60 per cent to EUR40 million.
Frank Appel, CEO, Deutsche Post DHL Group, commented: "After the successful execution of Strategy 2015, the current year represents a year of transition. In the second quarter we worked very hard and took important steps towards the successful implementation of our Strategy 2020. With that, we want to ensure the long-term, profitable growth of the Group. To achieve this, we have recorded some short-term impact on our results."
Source : HKSG.