Depressed revenue and bad debts pushed profit in the second quarter down 71 per cent for the world’s biggest logistics company as Deutsche Post DHL warned of tough market conditions going forward. Profit plunged to US$93.7 million from $328 million a year ago. Mail, express, freight forwarding and contract logistics revenue all shrank by nearly 18 per cent to $15.8 billion. Operating income fell by a lower-than-expected 38 per cent to $392 million, aided by cost cutting.

The Bonn-based company, which ceased domestic express deliveries in the US in January after substantial losses, forecast full year profit of $1.7 billion compared with $3.42 billion in 2008.

The earnings forecast “is built on the assumption we won’t see a substantial improvement of global trade in coming months,” said CEO Frank Appel.

The express division cut costs faster than targeted, offsetting lower volume and leaving second quarter profit unchanged from a year ago at $93.7 million. Revenue tumbled 28.6 per cent to $3.6 billion. The group’s global freight forwarding unit won new business worth $355 million a year in the life science, fashion, high tech, automotive and industrial project sectors during the quarter, but weaker demand in the technology and engineering sectors as well as lower freight rates and fuel surcharges depressed earnings to $112 million from $146 million a year ago. Revenue plummeted 27 per cent to $3.7 billion.

The supply chain division booked new business worth $355 million a year in the quarter and reported a contract renewal rate of around 90 per cent, but earnings fell to $22.7 million from $91 million due to the bankruptcy of a major German customer, Arcandor. Supply chain revenue was off 9 per cent at $4.4 billion.