* Q2 revenue 13.649 bln eur vs Rtrs poll 14.058 bln eur
* Q2 EBIT 619 mln eur vs Rtrs poll 620 mln eur
* Hikes full-year EBIT profit outlook by 50 mln eur
* Cites release of last year's provision at mail
* Shares up 2.8 pct vs flat blue chips board
By Marilyn Gerlach
FRANKFURT, Aug 6 Deutsche Post's
strategy of investing in Asia paid off in the second quarter as
it gained market share in its express delivery business,
offsetting losses from cost-conscious customers switching to
cheaper shipping options.
The world's largest postal and logistics company by revenue
reported a 14 percent rise in operating profit that was in line
with expectations and raised its guidance for the whole of 2013
by 50 million euros to 2.75-3.0 billion euros.
Revenues from ocean-going and air freight were both driven
lower by falling prices, but the improved overall forecast
prompted a rise in its share price and contrasted with a profit
warning issued last month by rival United Parcel Service
Chief Financial Officer Larry Rosen said that the change in
guidance was a "technical matter" of reversing a loss provision
in its mail business but also reflected improvement in the
Express business in small, fast international deliveries for
"Overall we think were doing quite well," he told reporters.
"We're probably gaining some share in the Express business.
We've invested in the right places. We're very well positioned
in emerging markets."
Deutsche Post's international arm DHL - comprising express,
freight forwarding and supply chain - has a dominant market
position in the Asia-Pacific region, and while macroeconomic
trends in China are weakening, intra-Asian trade flows are still
healthy, benefiting the express market there.
UPS, whose package delivery business is bigger than Deutsche
Post's, has been hurt by a weaker than expected outlook for the
second-half in the United States, where the German company has
Deutsche Post also still owns Germany's post office network
and has about 80 percent of the domestic mail market in Europe's
biggest economy. Profits from that business, which includes
booming deliveries for online retailers, rose to 223 million
euros from 38 million euros a year earlier, largely due to the
absence of a one-off payment for value-added tax.
DHL, already the leader in Asia with around a third of the
market, opened a 143 million euro hub in Shanghai last year to
move goods flowing to Northern Asia quickly.
China alone makes up half of the DHL group's revenues and
the new hub was part of a plan to raise the Asia-Pacific
region's share of DHL group sales to 30 percent by 2017 from
just under 20 percent in 2012.
The Express business worldwide saw organic growth -
stripping out the impact of some operating units it has now sold
- of 4 percent. Its revenues in Asia-Pacific were 2.1 billion
euros in the first-half, implying a figure of around 1.1 billion
in the second quarter.
"The Express business is well positioned, and it seems that
clients are still prepared to pay if they want something
delivered the following day," said analyst Dirk Schlamp of DZ
Deutsche Post revenues overall in the second quarter,
however, were a touch below forecasts at 13.649 billion and
Rosen said the freight market was still suffering from five
years of economic turmoil.
Second quarter revenues from air freight fell 11.6 percent,
due to a decline in demand from customers in technology,
engineering and manufacturing sectors, the company said. Ocean
freight revenue also fell, but at a slower rate of 5.6 percent.
"There are fewer volumes to transport and this has led to a
price war," said Schlamp.
By contrast industry data from China cited by investment
bank Morgan Stanley shows volumes in the international Chinese
express market were up 48 percent year-on-year in the second
At 0837 GMT shares in Deutsche Post rose 2.8 percent to
21.93 euros, outperforming a flat blue chip index.