“Normalization” causes stagnation in volumes, revenues and profits for DHL

Continued weak demand hurt second-quarter revenue from German logistics giant DHL, with its freight division bearing the brunt of the bad news.

Group revenue fell 16%, to 20.1 billion euros ($22.07 billion), in the three months to June, about 1.5 billion euros less than analysts’ expectations, resulting in operating profit falling 27%, to 1.69 billion euros, with Chief Financial Officer Melanie. Chris blames the post-pandemic effects.

On a call with an investor, she said, “We all knew normalization would come after an extraordinary year in 2022; normalization is here now.”

This “normalization” amounted to a 40%+ drop in freight revenue (€4.8 billion) and almost a halving in profit, down 47.2% to €388 million, plus a 13% drop in air freight volumes and a 9.1% drop in freight volumes marine. for the quarter.

In its earnings report, the company cited strong declines in air volumes between China and Europe and China and the United States, with weaker demand from China on the ocean side as well.

“Yes, the numbers are down significantly for global freight compared to Q2 2022, but you also have to keep in mind that Q2 was an exceptional quarter – it generated our highest earnings ever as a group,” said Ms. Kress. “And even when those results came out, it was clear that there was going to be a normalization, and that normalization is what’s happening now.”

Looking at the semi-annual performance of the freight division, revenue decreased by 33.5%, to €10.3 billion, with profits down to €777 million, 41.8% less than last year, with air volumes down 15.9% and ocean volumes down 7.1%.

Express was marginally better, with Q2 revenue and profit down 12.5% ​​(at €6.1 billion) and 18.2% (€901 million) respectively, with semi-annual revenue and profit down 7.2% and 12.9%.

Ms. Chris said of the performance of the Express division: “Volumes are still decreasing, so we continue to have a strong focus on yield and cost management, but we’re managing volume normalization in a very solid way.

“Overall, I would say we published a solid set of numbers that measure up well alongside recent peer reports.”