Thursday November 5, 07:45 AM
Deutsche Post raises target even as loss reported
FRANKFURT (AFP) - German logistics group Deutsche Post (Xetra: 555200 - news) raised on Thursday its full year operating profit target owing to signs of a sector pick-up even though third quarter results fell into loss.
The former German mail monopoly expects core earnings before interest and tax (EBIT) of at least 1.35 billion euros (billion dollars) in 2009, compared with a previous estimate of 1.20 billion, a statement said.
Its third quarter results did not argue in favour of that however, as sales plunged by 19 percent from the same period a year earlier to 11.2 billion euros and the group posted a net loss of 83 million euros.
Analyst polled by Dow Jones Newswires had forecast a smaller net loss of 68 million euros.
Deutsche Post said the result suffered from a charge of 146 million euros stemming from a slump in orders from the retailer Arcandor (Xetra: 627500 - news) , whose mail-order unit Quelle is being liquidated, and restructuring expenses tied to Deutsche Post's US express operations.
Deutsche Post also devalued put options on shares it holds in Deutsche Postbank (Xetra: 800100 - news) .
A put is an option to sell a security at a specified price, usually within a limited period.
New Deutsche Post boss Frank Appel said cost-cutting efforts were bearing fruit but that "even though we see the first signs of stabilisation in volumes being transported, there is not yet a sign of a global economic pick up."
"We must not waver, on the contrary must reinforce our efforts," he said.
Deutsche Post aims to cut costs by one billion euros by the end of this year, and not by the end of 2010 as initially planned.
Since November 2008 it has saved more than 850 million euros.
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