DHL revenue is almost 90% generated by international deliveries, with the rest brought by domestic deliveries. “DHL revenue rose by 8% in the first half of this year owing to deliveries to and from Europe,” said Gian Sharp, managing director with DHL International for Romania and Bulgaria. “We had this increase even though we’d gained a EUR1 million contract last year. Not taking into account this contract, the first half increase should amount to 12%.”
Gian Sharp also runs Cargus, which DHL bought in 2008, and both companies are currently controlled by Deutsche Post. The German group thus covers the Romanian courier services market through two distinct companies: DHL has a strong position on international deliveries, while Cargus is among the three largest domestic delivery service providers.
Last year, DHL Romania and Cargus reached EUR57 million in turnover, almost flat from 2009. DHL International Romania ended last year with turnover of 151 million lei (EUR35 million), up 9% in euros on the year, according to Finance Ministry data. While turnover rose, the company’s profit shrank. Thus, from RON5.4 million in 2009, profit dropped to RON580,000. “The decline comes amid last year’s investments,” explains Gian Sharp.
In the first six months of this year, demand for international deliveries from corporate clients increased by 10% in Bucharest and by 20% in Cluj and neighboring areas. Finnish company Nokia, one of DHL’s clients, is present in Cluj. DHL also has car companies, Renault Dacia group, and fashion companies, such as H&M, among its clients. DHL also works with Honeywell, which operates in Romania through four companies.
“For this year, we expect revenue to rise in line with our market share expansion strategy, through investments meant to improve pickup and delivery times across the country”. DHL’s market share widened by 2% last year to 44%, said Gian Sharp.
Most international deliveries are operated from and to Germany, with England, France, Italy, as well as China and the U.S. as other major markets.
Cargus saw deliveries rise by 21% in the January-August period, with revenue climbing by 4% in the first half. “By yearend, we expect revenue to grow by 8% from last year”. Internal delivery services bring around 96% of Cargus’ revenue.
“There’s tighter competition on the domestic market, there are more players. The company’s profit dropped amid price pressures, we renegotiated several contracts amid the economic downturn and market competition”. Cargus ended last year with turnover of RON92.9 million, down 9% in lei from the previous year. The company’s profit fell from EUR1.2 million in 2009 to EUR261,000 last year.
Gian Sharp believes the takeover of Cargus was a “good decision” and at present the company is not mulling any new acquisitions.
(English version by Catalina Apostoiu; Editing by Loredana Fratila-Cristescu)