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Deutsche Post DHL reports strong Q1 results as B2B demand surges

German shipping and logistics giant Deutsche Post DHL Group on Tuesday reported strong first-quarter revenue and earnings gains as it capitalized on a rebound in business-to-business demand and withstood a retreat to historical trends of business-to-consumer activity.

The Bonn-based company (OTCUS: DPSGY) reported earnings per share of $1.16, exceeding analysts’ estimates of $1.04. Earnings before interest and taxes rose to more than $2.3 billion from $2 billion. Revenue rose nearly 20% to nearly $23.8 billion.

The company affirmed its full-year earnings forecast of $8.4 billion and expects to hit $8.95 billion in 2024, it said.

“The global B2B business was the key driver” of the quarterly results, Deutsche Post DHL said. Global trade has “so far proven resilient” in the wake of Russia’s invasion of Ukraine, CEO Frank Appel said in a statement. Deutsche Post DHL operates five business units that encompass every aspect of global transportation and logistics. Its collective size and breadth are considered to be unmatched in the industry.

For the first time, the company’s air and ocean freight forwarding division led all units in quarterly revenue, posting a 54.9% increase to nearly $7.8 billion. Earnings before interest and taxes nearly tripled year-over-year. The unit benefited from stronger air and ocean volumes and more favorable margins.

Deutsche Post DHL’s air express unit posted a 15.9% revenue gain to $6.7 billion, despite a year-over-year decline in volumes. The top-line gains were due to heavier weighted shipments and the impact of fuel surcharges, the company said. Earnings before interest and taxes came in at $1.02 billion, modestly higher than year-earlier estimates. The 2022 quarter’s results were affected by a $25.2 million asset impairment related to Russian operations.

DHL Supply Chain, the world’s largest contract logistics company, reported a 17.7% revenue gain to $4 billion. Earnings before interest and taxes rose 22.8% to $215.6 million. The e-commerce solutions unit reported a 0.6% year-over-year drop in revenue as COVID-19 concerns diminished and more consumers returned to in-store shopping. Earnings before interest and taxes fell to $107 million from $123 million due to higher operating costs and changes in consumer buying behavior.

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