German transport and logistics giant DHL Group (DHL.DE) said Wednesday it reduced its 2023 earnings forecast in response to a hoped-for second-half global economic recovery that never materialized.
The Bonn-based company said it now expects full-year earnings before interest and taxes to range between $6.6 billion and $7.05 billion. Revenue for the third quarter, which DHL reported Wednesday, fell to $20.7 billion, down sharply from $25.6 billion in the year-earlier quarter. Operating profit in the quarter fell to $1.49 billion from $2.13 billion.
DHL executives said the year-over-year (y/y) declines were expected amid an environment of slowing demand, higher fuel prices and unfavorable currency fluctuations.
The company has said that its results would hinge on the best-case macro scenario — a recovery that would have started around midyear and continued through the balance of 2023-“no longer applies.” A second-half recovery has “so far failed to materialize” against a backdrop of tighter global monetary policy and the impact of geopolitical crises on overall demand, said DHL CEO Tobias Meyer in a statement.
At this point, DHL is expecting either a macro recovery to kick in at the end of 2023 or no recovery at all until at least 2024. The company will not achieve its best-case forecast of $7.5 billion in 2023 EBIT, it said.
The company’s two largest units, DHL Express, its time-definite air express service, and DHL Global Forwarding, its air and ocean freight forwarding business, reported significant y/y declines as demand and rates fell. At DHL Express, revenue fell 18.2% to $6.19 billion, while EBIT dropped 34.1% to $712 million. At DHL Global Forwarding, revenue fell 44% to $4.7 billion and EBIT dropped more than 46% to $326.6 million.
DHL Supply Chain, the world’s largest contract logistics provider, was the lone bright spot in the quarter. Revenue rose 1.8% to $4.48 billion, while EBIT increased 10.5% to $258 million. Top-line growth came from new business and contract extensions, with e-commerce business a standout, the company said.
DHL eCommerce, the company’s last-mile B2C business, reported a 0.8% drop in revenue to $1.58 billion. Revenue would have risen 3.2% were it not for a $63 million currency hit, DHL said. EBIT dropped 36.8% due to higher costs associated with network expansion.
For 2025, DHL forecast EBIT of between $7.4 billion and $8.5 billion. The company did not address 2024 forecasts in its statement.
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