Deutsche Post Sees 2012 Profit Growth on Worldwide Trade
Stock Chart for Deutsche Bank AG (DBK)
Earnings before interest and taxes will be 2.5 billion euros ($3.29 billion) to 2.6 billion euros compared with 2.44 billion euros in 2011, the Bonn-based company said today in a statement. Revenue rose 2.8 percent to 52.8 billion euros last year, and Deutsche Post plans to raise the dividend 7.8 percent.
“It is a strong outlook,” Jochen Rothenbacher, a Frankfurt-based analyst at Equinet AG who recommends buying Deutsche Post shares, said by telephone. “It’s a very narrow range and above my estimates. The dividend is also a positive surprise.”
The company, which is also the world’s biggest carrier of air and sea freight by volume, has focused expansion on express- package and cargo businesses in emerging markets while seeking to stabilize earnings at its mail unit. DHL’s Ebit will rise 13 percent to 15 percent annually until 2015, with the postal unit’s earnings remaining stable, the company reiterated today.
DHL ‘Well Positioned’
“The latest forecasts project that the world economy will produce solid growth of 3 percent to 3.5 percent this year,” Chief Executive Officer Frank Appel said in a separate statement. “There is no global recession lurking around the corner right now.” Expansion will be led by emerging markets, and “DHL is particularly well positioned there.”
Deutsche Post rose as much as 5.9 percent to 13.68 euros, the biggest intraday jump since Nov. 9, and was trading up 5.6 percent at 13.65 euros as of 1:40 p.m. in Frankfurt. The stock has gained 15 percent this year.
DHL, founded in the 1960s by three American entrepreneurs, contributed the biggest increase in Ebit, gaining 55 percent to 1.72 billion euros, as growth in Asia boosted the express business. The mail unit’s profit fell 1.2 percent.
Profit at the mail unit will remain stable this year as losses from declining letter volume are offset by growth in the parcels business, Appel said at a press conference today in Bonn. The company will consider “in the autumn” whether to increase postage prices in Germany, Juergen Gerdes, the head of the unit, said at the press conference.
Postbank Sale Effects
Net income last year fell 54 percent to 1.16 billion euros, held back by a valuation cost from the sale of the company’s Postbank unit. Excluding that effect, profit rose 51 percent. Fourth-quarter Ebit rose 14 percent to 599 million euros as sales gained 2.1 percent to 14.1 billion euros.
The Postbank disposal will generate a gain of 186 million euros, the final one-time effect from a disposal that began in 2009, Deutsche Post said in a presentation distributed to journalists. This effect will push total gains from the sale to 2.5 billion euros, Deutsche Post said.
Deutsche Post, whose European competitor TNT Express NV (TNTE) is in discussions on a possible takeover by United Parcel Service Inc. (UPS), will recommend raising the dividend to 70 cents a share from 65 cents last year.
The German company is “relaxed” as it will focus on expanding existing units rather than takeovers, Appel said today in a Bloomberg Television interview. The CEO declined to comment on whether Deutsche Post would be interested in any TNT or UPS units that may be sold to satisfy antitrust regulators, or to say whether Deutsche Post is interested in acquiring Movianto, the logistics unit of drug wholesaler Celesio AG. (CLS1)
Planes Versus Ships
Growth in pharmaceuticals and automotive air-freight shipments helped counter declines in demand from other customers, Roger Crook, head of Deutsche Post’s freight forwarding business, said at the press conference.
Demand for shipments by plane at Deutsche Post is declining more slowly than at competitors in the industry, while throughout the market “there has been a change from air freight to sea freight by a significant number of customers, obviously looking for a more economical solution,” Crook said.
“The air freight market as a whole is down 7.5 percent to 8 percent,” Crook said. “Air freight out of Asia is actually down more than the global market, with the tech sector down considerably.”
To contact the reporter on this story: Alex Webb in Bonn via firstname.lastname@example.org
To contact the editor responsible for this story: Chad Thomas at email@example.com
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.