Deutsche Post expects strong earnings in 2005
22 March 2005, BONN - German postal company Deutsche Post said on Tuesday it expects a strong rise in earnings in 2005 thanks to further cost-cutting and lower taxes resulting from the adoption of new accounting standards.
22 March 2005
BONN - German postal company Deutsche Post said on Tuesday it expects a strong rise in earnings in 2005 thanks to further cost-cutting and lower taxes resulting from the adoption of new accounting standards.
At a press conference, company financial officer Edgar Ernst said net earnings could be boosted by EUR 500 million as a result of adopting the International Financial Reporting Standards (IFRS).
In a statement to the Frankfurt Stock Exchange, Europe's largest postal company said that "regarding IFRS group accounts for 2005 and subsequent years this will lead to a reduced group tax rate of 20 percent". This would produce a "significant positive impact" on net income reported by the group.
Meanwhile earnings growth is to continue as Deutsche Post carries out its cost-cutting and efficiency programme 'STAR'. Last year, the programme helped to cut costs by EUR 862 million, with further savings of EUR 1.4 billion foreseen in 2005, the company said.
Deutsche Post said it expects its operating profits in 2005 to reach at least EUR 3.6 billion, after last year's 12.5 percent rise to EUR 3.35 billion.
Revenues in 2004 came to EUR 43.2 billion, up 7.9 percent on 2003 figures, with the group profit reaching EUR 1.59 billion, up 21.3 percent.
Amid the strong business improvement, Deutsche Post remained plagued by some problem areas, including an operating loss of EUR 495 million in its express postal operations in the United States.
Deutsche Post chief executive Klaus Zumwinkel said the losses in the US market this year are to be cut to EUR 300 million, with the operations now expected to reach the profit zone toward the end of 2006.
The US market remained the "biggest challenge" to Deutsche Post and its parcel delivery subsidiary DHL, he said.
Deutsche Post aims to invest some US$ 1.2 billion (EUR 0.9 billion) in its express operations in the United States in the coming years in order to become a "strong third force" behind market leaders FedEx and UPS, Zumwinkel said.
Subject: German news