Postal and logistics giant Deutsche Post's fourth-quarter net profit dropped 61 percent on the year due to a US$912.59 million write-down at its loss-making US express division.
Net profit for the three months to December 31 was $391.26 million, down from $997 million a year earlier.
Per-Ola Hellgren of Landesbank Baden-Wuerttemberg said that the fall was due to difficult-to-assess special items, particularly hedging.
Deutsche Post, which competes with the likes of FedEx Corp and United Parcel Service (UPS), said it expected 2008 pre-tax profit of around $4.9 billion, up from $3.36 billion in 2007. It reiterated its expectations for earnings before interest and taxes to reach $6.45 billion in 2008 and $7.22 billion the following year.
In the fourth quarter, the closely-watched EBIT fell to $1.01 billion from $1.96 billion a year earlier, following the hefty write-down in the US express division.
Fourth-quarter sales rose 3.9 percent to $26 billion from $25 billion.
The company said it would retain the loss-making US express operations, although a study of possible options for it will be presented in May.
"A pullout is not in the offering," chief executive Frank Appel said, and added that the US market "is a firm component of the company's growth strategy".
"Our focus remains on organic growth and improving cash generation and cash payout to shareholders," said Appel, who took the helm last month after predecessor Klaus Zumwinkel resigned amid a probe by German prosecutors into alleged tax evasion to the tune of $1.5 million.
Zumwinkel received a total salary, including bonus payments, of $4.27 million in 2007. He received a fixed salary of $2.3 million and fringe benefit payments of around $87,571 and a performance-based bonus payment of $1.88 million.
Chief financial officer John Allen received total payments of $3.19 million for 2007, consisting of a fixed salary of $1.32 million, plus fringe benefits of $669,847 and a performance-based bonus payment of around $1.19 million.
Altogether, Deutsche Post paid its executive board members $24.12 million in fixed and performance-based payments in 2007.
The company is examining all options for Postbank, Appel said, adding that as Germany's leading retail bank it presents a very attractive takeover opportunity for other banks. Appel previously said that Postbank would play a "self-confident role" in the consolidation process of the German banking sector.
Deutsche Bank and Commerzbank have expressed interest in the retail bank, Germany's largest by customers. The German government holds 31 percent in Postbank's parent company Deutsche Post via state-owned KfW Bankengruppe.
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