Deutsche Post’s operating profit jumps 50% in the fiscal third quarter

Deutsche Post’s operating profit jumps 50% in the fiscal third quarter
Written by:
Wajeeh Khan
November 10, 2020
  • Deutsche Post’s operating profit jumps 50% in the fiscal third quarter.
  • The German firm forecasts up to £3.92 billion of annual operating profit.
  • Deutsche expects its free cash flow to print at over £1.78 billion in fiscal 2020.

Deutsche Post (ETR: DPW) said on Tuesday it expects an eCommerce boom in the upcoming Christmas season. The package delivery is now committed to expanding its capacity to hander higher demand in the upcoming months.

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Deutsche forecasts up to £3.92 billion of annual operating profit

Deutsche Post said that its operating profit in the fiscal third quarter printed at £1.25 billion that represents a 50% annualised growth. In terms of revenue, the company saw a 4.4% year over year increase to £14.41 billion in the recent quarter versus a slightly lower £14.34 billion expected.

For the full financial year, Deutsche forecasts its operating profit to fall in the range of £3.65 billion to £3.92 billion. Hitting the upper end of the guidance, it added, will only be possible if its delivery network proves sufficient during the Christmas season when volumes soar.

Deutsche also said that it expects its free cash flow to print at over £1.78 billion in fiscal 2020. It had previously forecast £1.60 billion of free cash flow this year. In the prior quarter (Q2), Deutsche Post had reported £800 million of operating profit.

Other prominent figures in Deutsche Posts’ earnings report on Tuesday include an 11.6% increase in volume at its parcel business in the third quarter. Revenue from express division climbed 14.6%, and ecommerce solutions sales came in 26.1% higher in Q3.

CEO Frank Appel’s comments on Tuesday

CEO Frank Appel of Deutsche Post commented on the financial report on Tuesday and 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 benefitting both small and large customers globally. With our global services, we keep the world economy running even during the crisis. Every day, our employees perform exceptionally well under challenging conditions to provide our customers with the best possible service.”

Appel also said on Tuesday that Deutsche Post was well prepared to distribute COVID-19 vaccine once it’s ready.

At the time of writing, the German multinational package delivery company is valued at £42.04 billion and has a price to earnings ratio of 21.26.