Germany (Reuters) – Deutsche Post DHL Group said it expected slower profit growth this year than analysts predicted but did not see a major impact on global trade from geopolitical tensions.
In an industry seen as a bellwether for the global economy, U.S. rival FedEx Corp jolted investors in December with a steeper-than-expected cut in its 2019 profit forecast, warning of weakening freight demand as the global economy slows.
But Deutsche Post Chief Executive Frank Appel said he was not worried, adding that the business had a broad base that made it resilient even if global economic growth weakened.
“We have not seen any signs of a noticeable slowdown on the horizon,” Appel said. “The fundamental growth from globalisation and digitalisation will continue.”
FedEx executives said they had noted a sharp slowdown in Britain due to uncertainty over the country’s departure from the European Union, Germany’s economic contraction, protests in France and a cooling down of the economy in Asia.
The German postal and logistics group reported that fourth-quarter sales rose 5.1 percent to 16.9 billion euros (14.50 billion pounds), above the average analysts’ forecast for 16.65 billion, while operating profit was in line at 1.1 billion euros.
Deutsche Post said operating profit should rise to between 3.9 billion euros and 4.3 billion euros in 2019, and confirmed its guidance for the metric to reach at least 5 billion by 2020.
The 2019 guidance compares to average analyst forecasts for 4.1 billion euros, according to Refinitiv data, but includes a 400 million euro gain from disposing its China supply chain business.
“As a result, the midpoint of the underlying guidance range is 8 percent below consensus,” wrote Jefferies analysts.
Shares in Deutsche Post, which are down by a quarter in the last year, fell 1.3 percent at 0833 GMT.
The group had issued a profit warning for 2018 in June and started a restructuring programme at its Post – eCommerce – Parcel (PeP) division, including an early retirement programme, as well as splitting its post-and-parcel delivery division into a German and an international unit.
It could take several months until the measures had a positive impact on its figures, but they should help profitability for the year and longer term, Appel said.
(Editing by Sherry Jacob-Phillips and Edmund Blair)