Deutsche Post Stock: Profit Dip Prompts Forecast Adjustment

Deutsche Post DHL Group reported a 6.2% revenue increase to €20.59 billion in the third quarter of 2024, despite facing challenges that led to a profit decline. The logistics giant saw its net profit fall to €751 million, down from €807 million in the same period last year. This downturn is attributed to rising personnel costs, declining letter volumes, and weak margins in air freight operations. In response to these headwinds, the company has revised its profit forecast for the current year, now expecting an operating profit of over €5.8 billion, significantly below its initial target range.

Postal Rate Hike Controversy

The company's plan to implement a postal rate increase at the turn of the year has met with resistance. While the Federal Network Agency intends to approve a 10.5% price hike for letter postage, Deutsche Post argues this increase is insufficient to cover inflation and necessary investments. The company emphasizes that investments in the letter business will only be made within the limits of generated revenues, as the growing parcel business cannot fully compensate for declines in the letter sector.