Mail meltdown

6 March 2008 By William Echikson

The German mail giant suffered a 61% Q4 profit drop after a E594m writedown in its US DHL Express unit. The new CEO needs to find an American partner and dispose of the German bank unit. Even then, Deutsche Post remains a case study in why Europe needs better deregulation.

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Deutsche Post, Europe's biggest mail carrier, posted a 61% drop in fourthquarter profit on Thursday after writing down the value of its DHL Express unit in the US.

Net income fell to E255m from E649m for the quarter, the company said. Sales rose 3.9% to E17bn.

Chief Executive Officer Frank Appel, who took over last month after Klaus Zumwinkel resigned amid a German taxevasion probe, pledged to raise profits this year. He vowed to focus on improving DHL in the United States, where it is struggling against United Parcel Services and FedEx in a weakening economy, as well as deciding what to do with its Deutsche Postbank retail bank business.

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