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FRANKFURT - German mail and logistics company Deutsche Post DHL AG said Thursday its second quarter net profit fell 71 percent on weaker sales and one-time effects related to the insolvency of department store operator Arcandor AG, a close business partner.
Bonn-based Deutsche Post, whose operations include global shipper DHL, said it earned euro66 million ($94 million) in the April-June period compared with euro231 million a year earlier.
Sales were down 17 percent to euro11 billion compared with euro13.3 billion last year.
Post said the results were weighed down by euro15 million in charges on bad debt related to the bankruptcy of retailer Arcandor. Deutsche Post worked especially closely with the company on its mail order businesses.
Looking ahead, Deutsche Post said it may have reached the bottom in terms of volume declines of freight and mail but that there may still be other lingering economic effects that could affect business, such as customers closing factories or even seeking bankruptcy.
"The group doesn't expect a substantial recovery in world trade in coming months," the company said in a statement.
Deutsche Post said sales at its mail division, which was affected by Arcandor's insolvency, fell 7 percent to euro3.2 billion. Pretax earnings were euro171 million, down 38 percent from last year.
The company is working on a cost-savings program at the division, which has cut expenses by euro180 million in the first half of 2009.
The express division, which includes DHL, saw revenues decline by nearly 30 percent to euro2.5 billion, but managed to keep operating profit steady by reducing costs primarily in the United States, a key market. Pretax profit was euro65 million, nearly unchanged from year-ago levels.
Shares of Deutsche Post closed up 4 percent at euro10.37 in Frankfurt.
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