DHL’s Strong Q2 a Record $832M After Ecommerce Boosts DHL Express Volume and Revenue

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DHL’s ambitious restructuring agenda in 2015 is starting to pay dividends, with the company posting record-high Q2 results, reports Air Cargo World.

Earnings before interest and taxes rose to 40% to a record $832.25 million for the second quarter, prompting DHL to reconfirm its expected financial position for full year 2016. This occurred despite revenues for Q2 falling by 16%.

The ecommerce ‘megatrend’, as coined by the company, was a key driver for DHL Express volume and a key contributor to revenue growth.

“DHL took the right decision and made the right investments in 2015, a year of transition, to set the stage for improving our profitability this year,” said CEO Frank Appel.

CFO Larry Rosen stated that DHL Express segment was a continuing success story, driven by fantastic growth in time-definite international shipments. Volumes for express were up 8.2% in the second quarter. This was evidence that DHL was adding market share despite the overall slow growth in the market.

The general slow growth in the market were contributed by low fuel costs and surplus capacities, which put prices under pressure.

With the success of ecommerce logistics contributing to a strong Q2 for DHL, it does not come as a surprise that the company is set to expand its ecommerce operations to empower cross-border logistics capabilities. The company will be investing $137 million through 2020 to build eight fulfillment centers and upgrade existing warehouses in the US.

All of it will be aimed at supporting the growing global cross-border ecommerce market by allowing online vendors in the US to stock their merchandise in DHL’s fulfillment centers for quicker international deliveries.

A version of this appeared in Air Cargo World on August 4. Read the full version here.