DHL owner lifts outlook as virus spurs home delivery boom

Deutsche Post AG lifted its full-year target for profit and cash flow as express-delivery arm DHL targets a surge in home shopping spurred by the coronavirus crisis.

The shares advanced as much as 3.2% Wednesday after the German firm said it expects to post earnings before interest and tax of more than 6.7 billion euros ($8 billion) this year. It had said last month that the figure would be significantly above a prior 5.6 billion-euro forecast.

A shift toward online purchasing has accelerated during the Covid-19 pandemic as people are forced to stay home and many shops close or go bust. The loss of freight space in grounded passenger planes has provided a particular boost for DHL, which has a fleet of more than 260 specialist cargo aircraft and has ordered eight more from Boeing Co.

Cash flow this year should reach 3 billion euros, the Bonn-based company said, up from the previous estimate for over 2.3 billion euros.

Chief Executive Officer Frank Appel said in a statement that the January through March period had been “the best opening quarter” and that the group is “ideally positioned to benefit from the continuing boom in e-commerce and the resurgence in global trade.”

Shares of Deutsche Post shares were trading 1.7% higher at 49.47 euros as of 9:23 a.m. in Frankfurt, extending their advance this year to 22%.

The company confirmed that profit last year tripled to 1.9 billion euros.

For 2023 it’s forecastng an EBIT of more than 7 billion euros, versus previous guidance of more than 6 billion euros. The company expects to generate 9 billion euros in cash flows from 2021 through 2023.