DHL posts decent Q2 results despite economic headwinds

DHL Group overcame weak economic conditions and reported decent second-quarter results, the German conglomerate announced Tuesday.

Revenue of $22.1 billion was down year over year from $26.4 billion. Operating profit was about the same from the first quarter at $1.9 billion.

The company raised the low end of its 2023 earnings before interest and taxes (EBIT) guidance to a range of $6.8 billion to $7.7 billion from $6.6 billion to $7.7 billion. In the event of a global recovery early in the second half of 2023, the group expects EBIT of $7.7 billion. If there is a recovery at the end of the year, the company expects EBIT of $7.1 billion. In the event of no recovery by year-end, the company expects EBIT of $6.8 billion.

“Thanks to our balanced portfolio and global presence, we were once again able to demonstrate our resilience. This is particularly evident in times of weak global economic momentum,” said CEO Tobias Meyer.

“We took the right measures at an early stage to deal with the current macro environment,” Meyer said. The current earnings levels are well above the pre-pandemic years, he said.

Revenue in the DHL Express division, the company’s time-definite air operation, fell 12.5% to $6.7 billion. Excluding the impact of currency and lower fuel surcharges, revenue dropped 6.9%. Volume declined due to weaker demand, DHL said. EBIT declined 18.2% to $989 million.

DHL Global Forwarding, the company’s air and ocean forwarding unit, reported a 40.7% revenue drop to $5.3 billion due to lower volumes and normalizing freight rates. Excluding negative currency effects of $242 million, revenue was down by 38%. The company said the results were expected.

Revenue in the Supply Chain Division grew 4% to $4.7 billion in the quarter. Excluding negative currency effects, growth was 7.1%. All regions and sectors continued to register revenue increases, supported by new business, contract renewals and e-commerce business. Most of the new business was e-commerce-related and generated in the retail and technology sectors. EBIT rose to $298.6 million from $267.8 million.

The company’s e-commerce division reported a slight revenue decline to $1.7 billion. Excluding negative currency effects of $34 million, growth was 1.8%. EBIT fell to $85.6 million from $119.7 million due to higher investments in network expansion.

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Editor: Mark Solomon