The logistics group DHL does not rule out a further decline in profits for 2024.
A broad economic recovery is still a long way off, as the company announced on Wednesday in Bonn. CEO Tobias Meyer only expects results close to the record level of 2022 in the second half of the decade. Despite a surprisingly significant drop in profits last year, shareholders should receive an unchanged dividend. The board also wants to extend and increase the share buyback program. DHL shares still went down after the news.
In the morning, the stock was the biggest loser in the DAX via XETRA with a loss of 5.68 percent to 39.32 euros. The last time the share cost less was in November. Since the turn of the year, the price losses have totaled around 11.5 percent.
For 2026, DHL boss Meyer expects operating earnings before interest and taxes (EBIT) of between 7.5 and 8.5 billion euros. In the best case scenario, the group would exceed its record result of a good 8.4 billion euros in 2022. From the perspective of the DHL management, however, the reduction in inventories, which many companies are pursuing due to the difficult economy, would have to come to an end. Then the transport volumes between companies should grow again.
However, the recovery in global trade is still sluggish at the moment. “We will continue to experience major uncertainties such as volatility in demand and geopolitical crises in 2024,” said Meyer. There is still no broad economic upswing expected for the first half of the year, but transport volumes are expected to continue to fall in some cases.
For the second half of the year, Meyer expects global economic dynamics to be more positive than in the previous year. For the full year 2024, operating profit is expected to reach 6 to 6.6 billion euros. This means that DHL would only perform better in the upper half of the range than last year.
In 2023, DHL recorded an even greater drop in profits than expected. The surplus fell by almost a third to just under 3.7 billion euros. In day-to-day business, Bonn residents earned a good 6.3 billion euros before interest and taxes, around a quarter less than in the record year of 2022. Analysts had expected an average of more than 6.4 billion euros. Nevertheless, the post office wants to pay out an unchanged dividend of 1.85 euros per share.
Adjusted for special effects, the operating result was even significantly below average market expectations, noted industry expert Samuel Bland from the US bank JPMorgan. The one-off effects include, among other things, costs for the early retirement program in the domestic postal and parcel business, as well as income from the now completely consolidated business in the United Arab Emirates.
The people of Bonn performed poorly in all areas, wrote Bland in his first reaction to the figures. Analysts from the US analysis firm Bernstein Research pointed to a weak final quarter in the high-margin business with time-critical shipments. It once again accounted for around half of the group’s operating profit last year.
CFO Melanie Kreis reported an imbalance in trade flows in a conference call with analysts. This affected the profitability of the Express network in the fourth quarter. While the classic peak season at the end of the year was definitely noticeable in the end customer business, an improvement in the business customer sector is still a long way off. So far, no significant recovery in shipment volumes has been observed in the new year.
On Wednesday, management also put an end to speculation that had arisen in recent months surrounding the takeover of Deutsche Bahn subsidiary Schenker. The people of Bonn will not throw their hat into the ring. “The Schenker wedding seems to be in progress, but we are not the husband,” said company leader Meyer on Wednesday morning in an interview with the TV station CNBC.
For DHL, the focus continues to be on acquisitions that could strategically complement the business, according to the management board’s presentation at the analyst conference. That’s why we consciously decided not to take part in the Schenker takeover process.
/lew/mis
BONN (dpa-AFX)
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