By Dominic Chopping

DHL owner Deutsche Post posted an earnings decline in the first three months of the year as geopolitical tensions, inflation and high interest rates continued to drag on global trade, but said things should improve in the second half of the year as it backed full-year guidance.

The German logistics group, also known as DHL Group, on Tuesday reported an 18% drop in first-quarter net profit that came in just above expectations.

"As expected, a broad and dynamic economic upturn failed to materialize in the first three months of the year," it said.

"DHL Group continues to expect more positive global economic momentum in the second half of 2024."

Volumes in the company's key Express business have struggled to recover since the end of the pandemic as customers have reacted to slower demand by utilizing inventory already held in stock rather than ordering new, which has dented demand.

In the freight forwarding business, although air and ocean volumes are ticking higher, freight rates have normalized, which is pressuring revenue, it added.

In response, DHL has focused on containing costs and lifting prices to protect profit, ahead of what it expects will be pick up in the global economy during the second half of the year.

Deutsche Post previously cautioned that it expected volumes to decline further in some markets in the first half of the year, sending earnings lower, before a pick-up in global economic momentum is expected to send earnings higher in the second half.

"We are in an unusually long phase of low momentum in global trade," Chief Executive Tobias Meyer said.

"In this environment, we continue to focus on consistent capacity and cost management."

Deutsche Post said earnings before interest and tax fell to EUR1.31 billion in the quarter from EUR1.64 billion a year before, in line with a company-compiled consensus of EUR1.28 billion.

Net profit fell to EUR743 million versus the EUR721 million consensus expected, as revenue fell 3.2% to EUR20.25 billion, just below the expected EUR20.44 billion.

The company still expects EBIT in 2024 to reach between EUR6 billion and EUR6.6 billion, rising to EUR7.5 billion-EUR8.5 billion in 2026. It posted EBIT of EUR6.35 billion in 2023 and a company-compiled consensus expects 2024 EBIT at EUR6.23 billion.

Write to Dominic Chopping at

(END) Dow Jones Newswires

05-07-24 0228ET