Deutsche Post AG Sees Hit From Asset Writedowns and Provisions

   By Ulrike Dauer

FRANKFURT--German mail and logistics company Deutsche Post AG (DPW.XE) on Wednesday warned that its nine-month and full-year earnings will take hits from asset writedowns and provisions to cover expenses needed to roll back new information technology piloted in some countries.

Further hits will come from a new assessment of legal and regulatory aspects in three business divisions, the company.

As a result of both, Deutsche Post said it now expects an operating profit of at least 2.4 billion euros ($2.65 billion) for 2015, down from a previous forecast of EUR2.95 billion to EUR3.1 billion. That forecast had already been lowered three months ago from the previous guidance of EUR3.05 billion to EUR3.2 billion.

Nine-month earnings will take a EUR345 million hit from asset write-downs and provisions for a new IT structure in the DHL Global Forwarding business unit that the company piloted, but has now decided to gradually roll back and replace by another system.

Full-year EBIT will be hit by a one-time charge of EUR200 million from the reassessment of legal and regulatory risks in the three divisions Post-eCommerce-Parcel, Express and Global Forwarding, and Freight, the company said.

A spokeswoman said the EUR200 million charge combines several small hits the company expected in the coming years and that it decided to take this year, which it considers a transition year.

Deutsche Post Chief Executive Frank Appel said the company is taking those charges to ensure it can meet its 2016 and 2020 targets. It kept its 2016 operating profit guidance unchanged at EUR3.4 billion to EUR3.7 billion.

Deutsche Post shares fell by almost 2% in post-trading.

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(END) Dow Jones Newswires

October 28, 2015 15:49 ET (19:49 GMT)

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