DHL controls costs on volume decline fears

Deutsche Post DHL has said that it will continue to cut costs wherever it can as it expected further volume declines this year.

 

At yesterday’s annual general meeting, CEO Frank Appel told shareholders: “Particularly in times of economic crisis, it is of extreme importance for us to further strengthen our financial flexibility.

 

“Even if market reactions are in part irrational and the general mood may shift just as quickly again, we’re prepared for the economic crisis to continue.

 

In particular, earnings at the Mail corporate division have been directly affected by the current slump in demand, so that we’re forced to focus even more on reducing our cost base.”

 

The company said that in the first quarter of 2009 volumes in all its divisions decreased compared to the fourth quarter last year, but added “the rate of decline has stabilised suggesting that overall flows are bottoming out”.

It will release its detailed first-quarter results on 6 May, but said that net income in the period was close to €1bn (US$1.3bn).

 

In March, Appel announced DHL’s response to the recession – Strategy 2015, which outlined a range of initiatives aimed at refocusing the labyrinthine structure of the group into two main pillars: mail and integrated logistics. It was expected that this would produce significant cost savings.

 

It added that its Express division showed better profitability toward the end of the quarter, with the exception of its

US operations, and that Supply Chain actually recorded increased underlying ebit year-on-year.

 

Source: ifW