Coronavirus wipes up to 70m euros off Deutsche Post's Feb earnings

[BERLIN] The coronavirus outbreak has wiped up to 70 million euros (S$107 million) off Deutsche Post's operating profit this month, the German post and logistics group said on Friday.

The owner of the DHL delivery business also said it expected to take a one-off charge of 300-400 million euros this year related to its electric van business, and added that neither this nor any estimated impact of the virus outbreak was included in its financial guidance.

The current guidance for 2020 is for group earnings before interest and tax (EBIT) of more than 5 billion euros. Deutsche Post on Friday reported group EBIT of 4.128 billion euros for 2019, within its forecast range of 4.0-4.3 billion euros.

"In the past weeks, trade volumes have weakened, not only on the inbound and outbound China trade lanes but also in countries of Asia; constraints on industrial production are increasingly expected also outside of China," the company said, adding disruption related to the virus outbreak had wiped 60-70 million euros off group EBIT in February versus internal projections.

Citing global economic uncertainties, Deutsche Post said it would no longer pursue exploratory talks on possible partners for Streetscooter, its electric van business.

Streetscooter would in future focus on operating its current fleet, it said, adding that decision would lead to the one-off charge of 300-400 million euros.

Chief Executive Frank Appel said Deutsche Post was also ending its cooperation with Ford on the production of vans. It was making one of the Streetscooter models with Ford.

Chief Financial Officer Melanie Klein said the company expected a recovery in business when the coronavirus crisis was over, but added it was unclear when that would happen.

Deutsche Post said its forecast for group EBIT of a minimum of 5.3 billion euros in 2022 was not affected.

REUTERS