Deutsche Post Q4 net loss narrows to $385 million

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FRANKFURT — German mail and logistics company Deutsche Post AG said Tuesday its net loss for the fourth quarter narrowed to euro283 million ($385 million) largely because of a cost savings program and better management of its U.S. express division.
Deutsche Post, which owns express carrier DHL, lost more than euro3 billion in the fourth quarter of 2008. Revenue for the October-December period of 2009 was 12 percent lower to euro12.4 billion from euro14 billion a year ago.

For the full year, the company managed to post net income of euro644 million from a net loss of euro1.7 billion in 2008. Revenue was 15 percent lower to euro46.2 billion.

Deutsche Post, based in Bonn, said it expects a moderate recovery in global transport volumes for 2010.
The company predicts it will report earnings before interest, taxes and special items of between euro1.6 billion and euro1.9 billion in 2010, up from the near euro1.5 billion reported for 2009. Net profit is also expected to improve in 2010, and the positive earnings trend is expected to continue into 2011, although the company declined to provide figures.

Deutsche Post said it was able to make euro1.1 billion in cost savings during 2009, euro100 million ahead of forecasts, while it also benefited from better management of North American operations. The company recently ceased North American domestic express operations of DHL, which had contributed significantly to the company's losses in the past. The DHL division has always faced tough competition in North America from U.S. express companies FedEx Corp. and UPS Inc.

Deutsche Post said it had reached its target of limiting the U.S. express business' losses to under $400 million during the fourth quarter.

"We have successfully managed the repercussions of the economic crisis and exceeded our targets for 2009," Frank Appel, the company's chief executive, said in the report.

"Thanks to strict cost management and the consistent implementation of our strategy, we are now able to benefit over-proportionally from the accelerating global economic recovery," Appel said.

Shares of Deutsche Post were 1.3 percent lower at euro12.65 in Frankfurt morning trading.