Coronavirus: Deutsche Post loses 70 million euros off February earnings

The outbreak of the COVID-19(caused by novel coronavirus) has wiped up to 70 million euros ($76 million) off Deutsche Post’s operating profit this month, informed the German post and logistics group on Friday.

DHL delivery business owner also said that it expects to take a one-off charge of 300-400 million euros this year related to its electric van business. He added that neither this nor any estimated impact of the virus was included in the company’s financial guidance.

The current guidance for 2020 is for group Earnings Before Interest and Tax (EBIT) of more than 5 billion euros. Deutsche Post on Friday reported group EBIT of 4.128 billion euros for 2019, within its forecast range of 4.0-4.3 billion euros.

The company, while informing about the wipe-out of 60-70 million euros off group EBIT in February versus internal projections, said, “In the past weeks, trade volumes have weakened, not only on the inbound and outbound China trade lanes but also in countries of Asia; constraints on industrial production are increasingly expected also outside of China,”

Deutsche Post shares were down 5.07% at 1438 GMT.

Coronavirus, which started in China and has since spread around the world, has crashed the World share markets.

Deutsche Post while citing global economic uncertainties, said that the company would no longer pursue exploratory talks on possible partners for its electric van business, Streetscooter.

It said, Streetscooter would in future focus on operating its current fleet which would lead to the one-off charge of 300-400 million euros.

Frank Appel, CEO, Deutsche Post said the company was also ending its cooperation with Ford F.N on the production of vans. It was making one of the Streetscooter models with Ford.

Chief Financial Officer Melanie Klein said the company expected a recovery in business when the coronavirus crisis was over, but added it was unclear when that would happen.

According to Deutsche Post, its forecast for group EBIT of a minimum of 5.3 billion euros in 2022 was not affected.

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