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Business

Deutsche Post net increase belies drop in deliveries

Europe's largest mail carrier, Deutsche Post, saw its decline in volume accelerate in the first quarter, as Europe's recession continued. But net profits rose due to the sale of its Postbank unit.

A Deutsche Post DHL delivery truck

The volume of mail delivered dropped in the first quarter

Deliveries of letters, packages and freight dropped in the first quarter, more so than in the fourth quarter of 2008.

However, “the rate of decline has stabilized, suggesting that overall flows are bottoming out,” the company said at its annual shareholders meeting Tuesday in Frankfurt.

Earnings before interest and taxes, excluding one-time gains or costs, fell by less than 50 percent, it said.

'Mail is the cash cow'

But Deutsche Post's net profit was up by nearly a billion euros chiefly due to the sale of its Postbank retail-banking unit. Deutsche Post sold the subsidiary to German banking giant Deutsche Bank, a move that boosted net profit for the first three months of the year to "close to 1 billion euros ($1.29 billion.)"

Referring to the drop-off in mail volume, Martina Noss, an analyst at the Hanover-based Norddeutsche Landesbank, told Bloomberg news service: “The $100 million question is whether we're now seeing the bottom or not. ... mail is their cash cow, and that is suffering from the recession and higher wages.”