The slowdown in global trade is weighing on the logistics giant DHL.

As the global transport networks are not being optimally utilized, the Bonn-based company posted lower profits in the second quarter. Operating profit (EBIT) fell from April to June to 1.35 (1.7) billion euros compared to the same period of the previous year on slightly higher revenue of 20.6 (previous year: 20.1) billion euros, as DHL announced in Bonn on Thursday. Profit after minority interests fell to 744 (978) million euros. "We are (...) not observing a broad recovery in global trade," said CFO Melanie Kreis. However, air and sea freight appear to have bottomed out.

The Group is hoping for an improvement in the second half of the year and confirmed its forecast of an operating profit of between six and 6.6 billion euros for the financial year. "We are encouraged by the fact that all five divisions recorded rising sales in the second quarter for the first time in almost three years," said Kreis. But even if a recovery in the global economy is not very dynamic, the Group is optimistic that it will reach "the lower end" of the EBIT target range. The Bonn-based company's quarterly figures were in line with market expectations: Analysts had on average expected revenue of 20.3 billion euros and EBIT of 1.3 billion euros, according to estimates provided by DHL.

DHL is not alone in the industry with the decline in earnings. After the coronavirus years with the boom in online trade, lower freight rates and sluggish global trade have hit logistics companies hard. They also have to cope with the consequences of the Houthi attacks on merchant ships in the Red Sea. Competitor UPS posted lower profits in the second quarter with falling sales and lowered its margin target for the year as a whole. UPS had to digest declines in its US home market in particular. UPS CEO Carol Tome had also said that she hoped for an overall improvement in the second half of the year.

At DHL, the express and freight business in particular had to cope with declines. In the Group's largest division in terms of revenue, the Express division, operating profit fell by 24.2 percent to 683 million euros. The freight business recorded a drop of 28.1 percent. In contrast, the German business generated more operating income: In Germany, turnover and EBIT increased thanks to flourishing business with parcels.

(Report by Matthias Inverardi, edited by Patricia Weiß. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).