Deutsche Post DHL Group continued its successful growth trajectory in the first quarter of 2022, despite myriad global supply chain challenges and a normalisation in the level of e-commerce.
The group’s revenue improved by 19.8% to EUR 22.6 billion, following a significant jump in earnings in 2021 and a highly profitable first quarter of 2022 with operating profit (Ebit) of EUR 2.2 billion. This was up from EUR 1.9 billion in the first quarter of 2021.
The group had successfully balanced higher energy prices and transport costs, according to a statement released on Wednesday.
“The global B2B business was the key growth driver in the first quarter of 2022. Global forwarding, freight and supply chain in particular, but also express, benefited from a solid development in global trade and stronger B2B business,” DHL said.
Its earnings in global forwarding and freight almost tripled due to an “exceptionally positive performance” in the air and ocean freight business.
In the domestic and international parcel businesses, B2C shipment volumes normalised at the start of 2022 after an exceptionally high level in the previous year, due to the Covid-related restrictions on public life in many regions. Accordingly, earnings of E-commerce Solutions and Post & Parcel Germany were below the very strong level of 2021.
“The first quarter saw the expected normalisation in e-commerce. However, we were able to overcompensate that development with strong results in our global logistics activities. Overall, we had a good start into the year and further increased our earnings,” Frank Appel, Group CEO said.
Regarding the consequences of the war in Ukraine, Appel added: “Following the outbreak of war, global trade has so far proven resilient, yet we are closely monitoring the increasing challenges to global economic development.”
Free cash flow was around EUR 1.1 billion, excluding acquisitions like the completed transaction of ocean freight specialist JF Hillebrand Group for EUR 1.4 billion.
DHL’s chief financial officer Melanie Kreis said the group’s strong financial position allowed it “to invest heavily in our leading position” and to strengthen its resilience.
“This enabled us to acquire Hillebrand in the first quarter of 2022 without having to raise outside capital, while at the same time continuing to invest in the development of our core businesses. With capital expenditure of around EUR 12 billion until 2024, we want to push forward sustainable investments to expand our transportation, warehousing and sorting capacities and support our customers with new, low-emission solutions to achieve their carbon reduction targets,” Kreis said.
The company generated net profit after non-controlling interests of EUR 1.4 billion in the first quarter of 2022 compared to EUR 1.2 billion in the same period last year.
Basic earnings per share increased to EUR 1.10, after EUR 0.96 in the prior-year quarter.
Following the massive jump in revenue and earnings at eCommerce Solutions in the previous year, both key figures stabilised in line with the expected normalisation of parcel volumes. At EUR 1.4 billion, revenue was 0.6% below the previous year.
DHL said that its pricing measures had compensated for the expected decline in shipment volumes.
“Depending on the respective corona restrictions, parcel volumes have developed differently from region to region. Levels returned to normal, particularly in the Netherlands and United States, with significantly higher volumes in India. Despite the normalisation in online retailing and a slight increase in operating costs, the Ebit margin remained at a high level of 7.1%,” DHL said.
