Deutsche Post Rated Second Class

Post by **TrueBlueTerrier** » 31 Jan 2008, 09:46

LINK

LONDON - German mail operator Deutsche Post is not going to have a very happy new year in 2008 when the German postal sector is liberalized, say the analysts that downgraded the stock on Tuesday.

Although there have been efforts to delay the liberalization of Europe's 88 billion euro ($119.9 billion) mail market, which was pushed back to 2011 from 2009 in July, Germany is still on target to open up its national postal sector to competition at the start of next year.

"A delay to German mail liberalization (scheduled for 2008) now seems unlikely," said Matthew Lloyd, analyst with Goldman Sachs. He told clients that Deutsche Post (other-otc: DPSTF - news - people ) faced volume loss and margin erosion from increased competition, and downgraded the stock to "Sell" from "Buy."

Shares in Deutsche Post fell 67 eurocents (91 cents), or 3.1%, to 20.82 euros ($28.37) in Frankfurt. The stock finished bottom of the DAX index, which slid 28.52 points, or 0.4%, to 7,457.47.

Although Deutsche Post currently has over 90% market share in Germany, the threat to its business from outside competition has seen the company forecast a drop in earnings between 10%-20% in 2009.

So what options are there for the mail operator? According to Goldman Sachs' Lloyd, "a cost-cutting program is unlikely to compensate for revenue declines." On the other hand, he admitted that "a credible and larger than expected cost saving program" could do the trick.

Although reducing the size of the business is the most likely step the company will choose to take, it could opt for a break-up to release value or hope that private equity is still interested. Last week, shares in Deutsche Post climbed on speculation that Apax Partners would team up with U.S. rival United Parcel Service to buy a stake.

But there is no doubt that in the short term, Deutsche Post is about to get a lot of analyst hate mail.

james · Post by **james** » 06 Feb 2008, 23:52

HAVE THEY GOT A POST COM

Night Tonic · Post by **Night Tonic** » 07 Feb 2008, 00:20

Every European country has one or a equivalent

sevenandseven · Post by **sevenandseven** » 07 Feb 2008, 11:05

Exactly who is this 'liberalisation' benefiting in any country? Certainly not the taxpayers. Or the workers losing their jobs in the service of 'streamlining'. No, it is the big businesses with their billions sheltered in tax havens, the overpaid corporate executives and the well padded lawyers that devised the legislation in the first place. Welcome to the world of globalisation.

Night Tonic · Post by **Night Tonic** » 07 Feb 2008, 11:15

The Liberalisation plan never was aimed at domestic customers. Its mostly about encouraging cheaper business mail at greater speed.

Post by **plodsie** » 07 Feb 2008, 11:21

If you were to ask the public if a liberal post market has been good I'm certain you would get a big fat NO! What has been the effect?

40,000 odd postal staff losing their jobs.

The introduction of a single delivery a day, sometimes later in the afternoon.

The rapid increase in stamp prices.

No choice in sending mail, as no new postal licensee has even made any effort to open their service to the public, or supplied offices or boxes for them to do so.

A regulator meant to protect the USO, yet everything they have done so far, has only endangered it.

If the UK, by being the first to introduce it, was meant to show that postal liberalization works, then I am very suprised the EU are continuing.

norbert · Post by **norbert** » 07 Feb 2008, 13:13

plodsie wrote:If you were to ask the public if a liberal post market has been good I'm certain you would get a big fat NO! What has been the effect?

40,000 odd postal staff losing their jobs.

The introduction of a single delivery a day, sometimes later in the afternoon.

The rapid increase in stamp prices.

No choice in sending mail, as no new postal licensee has even made any effort to open their service to the public, or supplied offices or boxes for them to do so.

A regulator meant to protect the USO, yet everything they have done so far, has only endangered it.

If the UK, by being the first to introduce it, was meant to show that postal liberalization works, then I am very suprised the EU are continuing.

There was a article on Hellmail entitled Who cares about the USO . You have to think about who is feeding them with news with a slant /agenda .

Night Tonic · Post by **Night Tonic** » 07 Feb 2008, 13:42

Take your point Norbert and you're spot on about the wearing down of postal services but a lot of Hellmail content seems to be written by postal workers these days. I'm always mindful of 'got at' press but Hellmail often comes out on our side - depends what the subject is. Even Mark White today blasted the lack of interest in domestic mail and his latest one sits in our corner I'd say.

Same as newspapers generally. I may not agree with one writer one day but I might the next. Besides, I'd rather see sites that do have a poke at the establishment when its needed than none at all. There are few organisations, groups, newspapers taking ANY interest in the decline of our postal service. The press are quick these days to pounce on a postie caught thieving but all the really important stuff barely gets a mention.