German logistics company DHL Group on Wednesday (Nov 8) posted a 32 per cent drop in its third-quarter operating profit and narrowed its full-year and medium-term profit forecasts as falling e-commerce demand post-Covid continues to hit its business.

Earnings before interest and tax (Ebit) fell to 1.37 billion euros (S$1.98 billion) in the three months through September, the firm said in a statement.

That was in line with analysts’ expectations for 1.375 billion euros, according to a consensus published on DHL’s website.

Logistics companies have been racing to match costs to global demand that has fallen to pre-pandemic levels, and the entire industry is fighting for market share.

Reuters reported last month that UPS and its rivals for the first time in years have been using discounts and other incentives in a tough competition.

“The recovery of the global economy has failed to materialise so far, said DHL chief executive Tobias Meyer in a statement. “However, through investments in growth areas of our global business, we are well-prepared for the moment when the global economy recovers.”

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DHL now expects 2023 Ebit between 6.2 billion euros and 6.6 billion, lowering the upper end of its forecast range from 7.0 billion.

It also adjusted its midterm guidance. It now sees 2025 Ebit between 7.0 and 8.0 billion euros, down from previous guidance for more than 8 billion.

“This strikes us as a conservative view, as it appears to imply both a very weak macro environment extending out over the next two years,” Bernstein analysts said in a note to clients. REUTERS