Whereas many of the global air cargo carriers are facing strong headwinds, two others are flying with the wind strongly behind them and producing one good result after the
Namely, Deutsche Post-DHL and the Memphis based Federal Express (FedEx).
DHL reports massive Q2 revenues
DP-DHL ended their second quarter with a net income which was up 66 percent year-on-year although revenues for the same period were actually 3.5 percent below those of the same period in 2015.
Net income was reported as being EUR 541 million on revenues totaling EUR 14.19 billion.
The company showed an EBIT result of EUR 752 million which was 40 percent above that of Q2 2015.
The first half year results were given a heavy boost by the Q2 figures.
January to June net income totaled EUR 1.18 billion - an increase of almost 44 percent on 2015.
EBIT for the first half year ran at EUR 1.63 billion, an increase of just over 29 percent.
Revenues for the first six months totaled EUR 28.06 billion - a decrease of almost
5 percent on 2015.
Lower revenues and better results!
Where then did the good results stem from?
The DHL Express sector and an e-commerce business increase seem to have gone a long way to boosting net earnings despite a fall back on actual revenues.
The revenue decline is put down to negative currency results as well as the need to negotiate a revised contract with the UK National Health Service.
Despite the above, the company’s Express division again came up with strong figures.
DHL Express, despite negative currency trends, increased their first half year revenues by 1.2 percent to EUR 6.77 billion.
The Americas showed the strongest growth pattern for DHL Express with an increase in revenues generated by 6.5 percent. However, all regions showed an increase and much of this is attributed to what DHL terms as rising, high-value, cross border B2C traffic volumes.
The Express EBIT (EUR 777 million) contributed almost 48 percent of the total DP-DHL EBIT for the first half year.
FedEx fiscal profits soar by 73 percent
The small parcels giant, FedEx is not to be outdone by the DHL results.
The FedEx 2016 fiscal year which ended on May 31st showed net earnings of US$ 1.82 billion, which is a massive 73.3 percent increase on the 2015 revenues which had totaled
US$ 1.05 billion.
Revenues for the year were up by just over 6 percent to US$ 50.37 billion.
Operating costs for the year increased by almost 4 percent to US$ 47.3 billion and it is interesting to note that total operating income rose by almost 65 percent to US$ 3.07 billion.
Profit improvement programme and e-commerce increase
One continues to wonder how DHL, FedEx; and a few others manage to continue increasing profits year-by-year when the general air cargo scene runs from one low to another.
FedEx states that their 2016 fiscal results are due to its in-house profit improvement programme and another year of strong e-commerce growth.
Another positive aspect is of course the continued low fuel price.
But, all airlines have that advantage.
The company also boasts a very strong cash flow which has enabled it to continue investments in numerous projects.
One of the largest last year being the acquisition of TNT Express.
e- commerce - the profit solution for all in the future?
John Mc Donagh