Deutsche Post DHL reported mixed financial results for the second quarter, with a settlement and gains in the German parcel and mail business largely offsetting declines in its express, freight forwarding and contract logistics divisions.

However, a small rise in contract logistics revenue was attributed to growing business in Asia Pacific and among verticals including the automotive sector.

“Given the economic challenges we continue to face, we can be satisfied with our solid performance in the second quarter,” said Frank Appel, CEO of the company. “Our strength in the international express business and in Germany’s parcel market has paid off once again the past few months. Our focus on cash flow generation is also increasingly bearing fruit.”

DP-DHL reported second quarter revenues 0.6% lower compared to last year at €13.6 billion ($18.1 billion). The company blamed the small decline in negative exchange effects and other one offs. However, DHL attributed a nearly €80m rise in profits to €619m in the quarter to a €50m payment it received related to VAT charges on postage stamps. First half revenue was almost unchanged at just over €27 billion, with pre-tax profits up 7.8% to €1.33 billion.

The group’s freight logistics divisions had a more mixed second quarter and first half. The express business saw revenue drop 0.2%, while profits in the quarter were down more than 19% to €296m. DHL attributed most of this difference to the sale of domestic businesses in Australia, New Zealand and Romania and other factors that inflated last year’s results. The company said that time-sensitive international shipments had been a growth driver. First half revenue was stable at €6.26 billion, while profits were down 8% to €217m.

DHL’s freight forwarding arm continued to face a difficult economy in Europe, particularly around drops in air freight and container shipping. Revenue declined 6.3% in the quarter to €3.7 billion, while profits were down 6.5% to €129m. DHL pointed to on-going weakness in the traditional east-west trade, notably to Europe, although north-south trade, intra-continent routes and even overland European transport saw some rises. First half revenue was down 4.2% to €7.3 billion, with profits down 3.6% to €217m. 

DHL Supply Chain, the company’s contract logistics arm, which has a substantial share of business in the automotive and manufacturing sectors, was the only division to see revenue growth besides mail. Revenue rose 0.6% to €3.6 billion, although DHL said it would have been 6% higher if it were to strip away the effects of selling off three subsidiaries. The growth was fuelled in particular by gains in Asia Pacific, as well as the automotive, retail and consumer sectors, the company said. New business win set a quarterly record at €350m. First half revenue was up 1.4% to €7.03 billion.

Profits in contract logistics have dropped significantly, however, falling nearly 22% to €79m in the second quarter. DHL again attributed this fall to the disposals and restructuring charges. First half profit meanwhile was down more 15.5% to €163m.

DHL Supply Chain has major outsourcing contracts with a number of manufacturers, including managing Ford's inbound consolidation network in Europe and Jaguar Land Rover's inbound and in-plant logistics. The company is currently facing a dispute with the UK's Unite union over wages for logistics workers serving JLR plants, as well as the use of temporary staff in the supply chain.