BONN, Germany (Reuters) – Deutsche Post DHL Group said a restructuring programme in its German post-and-parcel division will help boost profit this year and that there were no signs of sluggish global trade despite rising geopolitical tensions.
In December, U.S. rival FedEx Corp jolted investors with a steeper-than-expected cut in its 2019 profit forecast, warning of weakening freight demand as the global economy slows.
However, Deutsche Post CEO Frank Appel said he was not worried, noting that the broad base of the business made the group resilient even if the global economic growth weakens.
“We have not seen any signs of a noticeable slowdown on the horizon,” Appel said.
The German postal and logistics group reported that its fourth-quarter sales rose 5.1 percent to 16.9 billion euros(14.50 billion pounds), above the average analysts’ forecast for 16.65 billion, while operating profit was in line at 1.1 billion euros.
Deutsche Post said operating profit should rise to between 3.9 billion euros and 4.3 billion euros in 2019, and confirmed its guidance for the metric to reach at least 5 billion by 2020.
The group had issued a profit warning for 2018 in June and started a restructuring programme at its Post – eCommerce – Parcel (PeP) division, including an early retirement programme, as well as splitting its post-and-parcel delivery division into a German and an international unit.
It could take several months until the measures have a positive impact on its figures, but they should help profitability for the year, Appel said.
(Reporting by Emma Thomasson; Editing by Thomas Seythal and Sherry Jacob-Phillips)