Deutsche Post stepped in to help its Deutsche Postbank unit raise cash in a capital increase even as it cut its own full-year profit outlook amid slowing economic growth. Europe's biggest mail and express delivery company said on Monday it would spend up to 1 billion euros ($1.26 billion) on new Postbank shares.
As long as the subscription price of 18.25 euros per shares was not exceeded, it said it would buy any shares that are not taken up by the market. Deutsche Post would then pass on almost 30 percent of the new shares to Deutsche Bank, which has agreed to buy Deutsche Post's stake in Postbank.
At the same time, Deutsche Post cut its full-year profit outlook for this year and next year, citing slowing global economic growth, especially at its US express business. Post now sees full-year earnings before interest and tax (EBIT) at about 2.4 billion euros, excluding one-time effects and the Deutsche Postbank unit, compared with a previous outlook of about 2.9 billion euros.
Sluggish consumer spending and shrinking investments by businesses are hurting shippers around the world, with the United States being hit hardest. Retail sales there dropped for a third consecutive month in September, the biggest decline in more than three years. Rival United Parcel Service Inc said on Thursday its third-quarter profit slid almost 10 percent on a sharp fall in demand in September.
Deutsche Post also scrapped its 2009 outlook, saying it expects global economic growth to slow with recession hitting some countries. Deutsche Post's shares were down 18.3 percent at 7.90 euros by 0816 GMT, while Deutsche Postbank's stock slid 15.5 percent to 15.86 euros. The German benchmark DAX index was down 4.8 percent.
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