Shares fall as company expects similar results in 2024
- DHL owner Deutsche Post forecasts no recovery this year
- 25% decline in annual profit
- Shares in Deutsche Post fell after sharp drop in profits
- Full-year sales dropped 10%
- Expects similar profits this year
- Plans to increase share buyback
- Weak global economy and trade impacted performance
- DHL Global Forwarding sales dropped 36.1%
- DHL Express reported a 10% drop in revenue
- Macro uncertainty expected to continue into 2024
Shares in DHL owner Deutsche Post fell on Wednesday after the German package courier posted a sharp drop in its full-year profits and said it expects to post similar results at the end of 2024. The Bonn headquartered company performed in-line with analysts’ expectations, posting a 10% drop in its full-year sales, to €81.76 billion, as it blamed a slump in the global economy for its underwhelming performance compared to the record results it reported in 2022. Deutsche Post, which trades under the name DHL Group, however, vowed to increase its share buyback with a view to acquiring another €1 billion of its shares from shareholders on top of the €4 billion it had already planned to purchase between now and 2025. The German firm’s full-year sales were hit by a sharp drop in revenue from its DHL Global Forwarding air and ocean freight transportation segment, which saw its sales drop 36.1%, to €19.31 billion, as it suffered from lower volumes and a global slump in shipping rates. The combination of a slump in the global economy and a glut in the supply of freight capacity following the end of a boom during COVID-19 caused freight shipping rates to fall sharply throughout 2023. Deutsche Post’s DHL Express parcel delivery service also reported a 10% drop in revenue as a slump in sales to business-to-business customers – caused by destocking and a weak macro environment – saw the segment’s volumes drop 2.5%. Looking forward, Deutsche Post CEO Meyer said he expects “macro uncertainty” to continue impacting the parcel courier’s business into 2024, as the company predicted a sharp uptick in its operating profits to €7.5- €8.5 billion by 2026. Analysts at Deutsche Bank, led by Andy Chu, said Deutsche Post’s results will like be “disappointing” to investors considering the absence of any “green shoots” of a recovery in volumes from its B2B business.
Factuality Level: 2
Factuality Justification: The article contains irrelevant details such as the history of Deutsche Post, unnecessary background information, and repetitive information about the company’s financial performance. It also lacks depth in analyzing the reasons behind the drop in profits and sales, and the predictions for the future are not adequately supported.
Noise Level: 3
Noise Justification: The article provides relevant information about Deutsche Post’s financial performance, including its drop in profits and sales, as well as the factors contributing to these results. It also includes quotes from the company’s CEO and analysts, giving some insight into future expectations. However, the article contains some repetitive information and could benefit from more in-depth analysis or exploration of potential solutions to the challenges faced by the company.
Financial Relevance: Yes
Financial Markets Impacted: Shares in Deutsche Post DHL fell after the company posted a sharp drop in its full-year profits and expects similar results in 2024.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to financial topics as it discusses the financial performance of Deutsche Post DHL and its impact on the company’s shares. However, there is no mention of an extreme event.
Public Companies: Deutsche Post (DHL)
Key People: Tobias Meyer (CEO), Andy Chu (Analyst at Deutsche Bank)
Reported publicly:
www.marketwatch.com 
