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Deutsche Post Profit Soars, But DHL Unlikely to Break Even in 2006

Deutsche Post World Net reported a 25.8 percent increase in fourth-quarter 2005 net profit yesterday resulting from strong demand for logistics. The German mail and logistics company said it expects sales to reach at least $72 billion in 2006 while operating profit will be flat.

DPWN also said that DHL in the United States would post another loss in 2006 and probably wouldn't break even in 2007, according to reports. The unit faces tough competition from U.S. rivals FedEx and UPS. In September, DPWN said DHL would see a loss of about $360 million in the United States this year. But Deutsche Post said it expects “strong improvement” in the unit's earnings in 2007.

In business year 2005, DPWN profit from operating activities rose 25.1 percent to $4.51 billion, up from $3.6 billion in 2004. Revenue grew 3.3 percent to $53.6 billion in 2005 while net income climbed 39.9 percent to $2.69 billion.

DPWN also said it plans a “First Choice” program to improve quality and customer service in order to ensure its dominant position in Europe and to compete with other shipping providers in the United States and elsewhere. The company also wants to be the employer of choice for managers and employees and a first choice investment for shareholders.

Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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