Deutsche Post Reports Profits Despite U.S. Losses

John Mullen, joint CEO of DHL Express, the parcel/express unit of Deutsche Post World Net (DPWN), said DHL would set service issues as a priority, given the 80% on-time performance in 2004. This quelled fears that DHL would spark a price war in an attempt to grow market share. But, according to Mullen, when and where DHL service levels are “back to acceptable levels,” it will bring prices up to competitors’ levels.

DHL lost Euro 495 million ($623 million) in the U.S. in 2004 on revenues of Euro 4.3 billion ($5.4 billion). According to Mullen, it does not expect to make a play for more market share until its hub network is complete (in 18 to 24 months).

According to DPWN CEO Klaus Zumwinkel, the U.S. express business has opened seven new hubs, has 1.3 million customers, and handles 389 million shipments per year. Its revenues of roughly $5 billion compare with an investment of $1.2 billion.

The DHL express network in Asia saw revenues rise 25%. European express revenues were up 4.3%, contributing to the overall revenue increase for express business of 16.3%.

The news at DHL’s parent DPWN was even more positive. The company reported profits of Euro 1.59 billion ($2 billion) on Euro 43.2 billion ($54.3 billion). Profits were up 21.3% while revenues grew 7.9%. First quarter results were “meeting expectations.” The company reported profits of Euro 455 million ($572 million), up 2% while revenues fell 0.4% to Euro 10.5 million ($13.2 million).

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