The DHL Group has increased its operating profit outlook for the year after preliminary results for the second quarter showed a strong improvement on last year led by the express division.
The Bonn-headquartered parcels and logistics group said that business development in the second quarter showed continued growth and, consequently, positive earnings momentum.
“Compared with the prior-year quarter, which had been impacted by customs and other trade policy conditions, the group recorded a return to significant revenue growth,” DHL said.
“In addition, the reduced cost base resulting from the Fit for Growth (cost-saving programme) measures continued to have a positive effect across the group, leading to second-quarter earnings rising more strongly than market expectations.”
The company’s preliminary results for the second quarter showed a 10% year-on-year increase in revenues, while earnings before interest and tax (ebit) increased by 29% to €1.85bn.
As a result, and assuming no further worsening of the geopolitical situation, the company raised its ebit outlook for the full year to €6.5bn from its previous forecast of €6.2bn.
Second quarter preliminary results for DHL Express show an ebit of €1.2bn compared with €730m last year, reflecting a “very favourable operating leverage effect of the return to weight growth” and further supported by gains of around €150m driven by capacity constraints in the airfreight market.
Meanwhile, DHL Global Forwarding generated ebit of around €240m compared with €196m last year due to a positive effect of low-to-mid double-digit million from successfully managing market disruptions.
DHL Supply Chain recorded earnings of around €305m in the quarter, compared with the prior-year result of €348m, although this included positive non-recurring effects of €54m.
Finally, DHL eCommerce reported ebit of around €50m compared with €56m last year after a non-recurring positive effect of around €20m related to M&A was offset by other negative non-recurring items.