BONN (dpa-AFX) - The logistics company DHL Group has started the year with a slump in profits. The DAX-listed company announced in Bonn on Tuesday that there was no significant upturn in the global economy in the first quarter. Many companies are continuing to reduce their inventories. As a result, fewer goods are being transported. In addition, prices for transportation are currently lower - which is also weighing on DHL's business figures. From the second half of the year, however, the Board of Management continues to expect a more positive economic development. It therefore confirmed its targets for the year as a whole and for the period up to 2026.

Shortly after the opening of trading, the DHL share price slipped by around two percent, almost reaching its lowest level of the current year. A little later, however, the share price turned around and gained around half a percent. The overall economic environment remains challenging for the Group, wrote Alexander Irving from US analyst firm Bernstein Research.

In the first quarter, DHL's turnover fell by a good three percent to just under 20.3 billion euros. Earnings before interest and taxes (EBIT) fell by almost a fifth to just over 1.3 billion euros. At the bottom line, the drop in profit to 743 million euros was similarly sharp. The comparison with analysts' average expectations was mixed: Revenues were slightly weaker, profit in the day-to-day business was roughly as expected and net profit was slightly stronger.

In a conference call with journalists, CFO Melanie Kreis reported on the cost-cutting measures introduced by the Group in recent months. Travel and events are being cut back across the Group. However, this is not enough. Costs would therefore also have to be cut in the operating business.

DHL is adjusting the network in its largest and most profitable business unit with time-critical express shipments. The division is using smaller aircraft. DHL is also making greater use of the cargo holds of passenger aircraft instead of transporting shipments with its own cargo jets, Kreis reported. The Group is also replacing leased aircraft with smaller planes when contracts expire.

Meanwhile, the Group has reduced staff at DHL Express and in the freight business. The manager emphasized that this was mainly due to the natural fluctuation of employees. In both divisions, the operating result fell by around 30 percent in the first quarter.

The European parcel business also lost operating profit, which DHL justified with higher investments. The supply chain logistics offering, on the other hand, developed positively. Here, the Group offers its customers services such as the operation of warehouses and the handling of shipping returns. The German mail and parcel business also performed better, following the negative impact of wage negotiations in the previous year.

"We are in an unusually long phase with little momentum in global trade," said DHL CEO Tobias Meyer. He expects global trade to pick up from the second half of the year and confirmed the targets for 2024 and 2026.

The Board of Management is forecasting earnings before interest and taxes (EBIT) of between 6 and 6.6 billion euros for the current year. In the worst-case scenario, this would be a decline of a good 5 percent compared to 2023 - in the best-case scenario, an increase of 4 percent. In any case, DHL will stay away from the record level of 2022 - in case of doubt for several years to come. At that time, the Group earned EUR 8.4 billion in day-to-day business. For 2026, the Board of Management has forecast between 7.5 and 8.5 billion euros./lew/stw/stk