Deutsche Post’s operating profit jumps 50% in the third quarter of the fiscal year.
The German company forecasts an annual operating profit of up to 3.92 billion pounds sterling.
For the 2020 financial year, Deutsche Post expects a free cash flow of over £1.78 billion.
Deutsche Post (ETR: DPW) said on Tuesday that it expects an eCommerce boom in the coming Christmas season. The parcel delivery company has now committed to expand its capacity to meet the higher demand in the coming months.
The company’s shares fell by more than 5% when the market opened. Deutsche Post is currently on the stock exchange with 10% over the course of the year. Here is what you need to know about selecting winning shares.
Deutsche Post forecasts an annual operating profit of up to 3.92 billion pounds sterling.
Deutsche Post stated that its operating profit in the third quarter was printed at 1.25 billion pounds, which corresponds to an annualized growth rate of 50%. In terms of revenue, the company reported a 4.4% year-on-year increase in the final quarter to £14.41 billion, compared with an expected slightly lower figure of £14.34 billion.
For the full year, the German company forecasts a decline in operating profit in the range of £3.65 billion to £3.92 billion. The upper end of the forecast could only be reached if the delivery network proves to be sufficient during the Christmas period, when volumes are rising sharply.
The German also said that she expects her free cash flow to exceed £1.78 billion in the 2020 financial year. Previously she had forecast free cash flow of £1.60 billion this year. In the previous quarter (Q2) Deutsche Post had reported an operating profit of 800 million pounds sterling.
Other prominent figures in Deutsche Post’s earnings report on Tuesday include an 11.6% increase in parcel volumes in the third quarter. Revenue in the express segment rose by 14.6% in the third quarter, while revenue in the e-commerce solutions segment increased by 26.1%.
The comments of CEO Frank Appel on Tuesday
Commenting on the financial report on Tuesday, Deutsche Post CEO Frank Appel said
“We had a successful third quarter and achieved improvements in revenue, EBIT and cash flow – thanks to our 550 thousand employees worldwide and our outstanding portfolio of e-commerce logistics solutions, which benefit both small and large customers worldwide. With our global services, we are keeping the world economy running even during the crisis. Every day, our employees perform exceptionally well under challenging conditions to provide the best possible service to our customers”.
Appel also said on Tuesday that Deutsche Post is well prepared to distribute the COVID 19 vaccine as soon as it is ready.
At the time of writing this article, the German multinational parcel delivery service is estimated at £42.04 billion and has a price-performance ratio of 21.26.