Deutsche Post Expects Heavy Losses in the US

Germany's Deutsche Post AG, the country's semi-privatized postal authority said Wednesday that losses at its US express and logistics business will be €200 million ($246.1 million) greater than expected this year. The news sent Deutsche Post's share plummeting four percent. The company said DHL Express America will have a loss of as much as €500 million, compared with an original planned loss of €300 million for 2004. It added that the US business will not break even until after 2006, a year later than planned. "We will do everything it takes to succeed in the very competitive US market and generate sustainable profits for our shareholders," Post finance chief Edgar Ernst said in a statement. Despite the losses, Deutsche Post reiterated it expects group earnings before interest, tax and amortization (EBITA) to rise by 7.5-12.5 percent in 2004 and to at least €3.6 billion in 2005.