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24 July 2024

ME is strong market for DPWN

DPWN has met its profit target for 2008. (AFP)

By Staff Writer

The Middle East has remained a strong market for Deutsche Post World Net (DPWN) given its robust performance in 2008 compared to other regions, said the company.

Express-delivery volumes for Europe's biggest mail carrier in the last three months of 2008 declined in all regions except the Middle East, Eastern Europe and Africa markets.

Air and ocean freight in all other regions fell by a double digit rate, said the company.

DPWN said it had met its profit target for 2008 despite its reservations earlier this year due to the deteriorating economic situation.

Operating profit before one-time items exceeded its $3.2 billion (Dh11.7bn) goal for 2008 as the company scaled back spending to confront the current global recession.

Strict cost management helped offset the effects of falling deliveries in the fourth quarter amid the worldwide economic slowdown, and full-year earnings were "just above" its target, said DPWN.

The company is scheduled to release detailed 2008 figures on February. 26. "The declines in logistics and express operations aren't surprising in the current market situation," quoted Markus Hesse, a Frankfurt-based analyst with Sal. "The results are fairly solid, also from the viewpoint of investments and cash position."

DPWN rose six cents, or 0.6 per cent, to €9.48 in Frankfurt trading, valuing the company at €11.5bn.

The DHL Express overnight-delivery unit's withdrawal from US domestic services "is proceeding as planned," DPWN said. The division's exit from the US following a decade of losses will involve firing 14,900 employees and closing three-fourths of its outlets in the country, with charges totalling €7.5bn by the end of 2009, Chief Executive Officer Frank Appel said in November.

DPWN is likely to weather the deepening economic slowdown "relatively well," even with dropping demand, Chief Financial Officer John Allan said. The company said it won't give an outlook for 2009 as business conditions remain "difficult."

The full-year loss before interest and taxes, including one-time gains or costs, was narrower than €1bn, Deutsche Post said.

Net debt was scaled back by 17 per cent to $3bn as of December 31 from $3.7bn a year earlier, helped by gains from property sales to Lone Star Funds.

Operating cash flow also exceeded $3.87bn.