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DHL Q2 profits beat expectations thanks to cost control

The German logistics giant DHL announced a higher-than-expected second quarter operating profit on February 2, as strict cost control helped overcome currency headwinds, and a slower pace of trade.

The company reported quarterly earnings before tax, interest and other expenses (EBIT) in the amount of 1,43 billion euros. This was above the consensus estimate of analysts of 1,33 billion euros.

DHL's revenue for the quarter fell by 3.9% compared to a year ago, falling below analysts' expectations of 21,01 billion euros.

The German logistics giant confirmed that it expects annual free cash flows excluding M&A to be around 3 billion Euros. It added that the forecast did not take into account potential impacts of changes in tariffs or trade policies.

Melanie Kreis, DHL's Chief Finance Officer, said that she expected continued volatility to be seen in the global economy during the second half of this year. This was due to the fact that trade conflicts and geopolitical tensions increased in the second quarter.

Kreis added that DHL had adjusted its capacity to match the demand and made structural cost savings.

The German logistics giant announced in March that it would cut 8,000 jobs on its domestic market by 2025. This is the largest reduction of staff in over two decades. It cited declining letter volumes and heavy regulations.

The global logistics industry has faced increasing challenges in the past year as rising trade barriers and geopolitical tensions have slowed down global trade. The trade tariffs imposed by U.S. president Donald Trump have contributed to the uncertainty in the industry, and put pressure on earnings and demand.

United Parcel Service followed suit, reporting a lower quarterly profit in July and again refraining from releasing full-year projections. ($1 = 0.8654 euros)

(source: Reuters)