Mail and logistics giant Deutsche Post AG (DPW.XE) Wednesday said it "may now be reaching the bottom in terms of volume declines" and expects more benefit from its cost-cutting program in the second half of the year and in 2010.

The former state monopoly added it stepped up its restructuring measures in its mail and express units. Higher efficiency at its mail unit should contribute about EUR300 million to the unit's earnings before interest and tax, or EBIT, in 2009, it said.

In response to lower volumes, it plans to further cut costs and avoid losses by extending working hours and postponing wage increases. Chief Executive Frank Appel said there are no alternatives.

It also plans to reorganize the express division and will scrap certain organizational levels, while "leveraging synergies on the global and regional levels."

In November, the Bonn, Germany-based company said it planned to cut about EUR1 billion in non-operational costs by the end of 2010. The express unit, which will contribute EUR460 million to these savings, is expected to reach its cost-savings target "by the end of 2009."

An analyst at Commerzbank said the company "managed to surprise positively with very good progress in cost savings and a further upgrade in restructuring measures."

The economic slowdown caused consumer spending to slump and sapped demand for consumer goods, which put the mail and logistics sectors under pressure as shipping volumes fell.

At 0845 GMT, Deutsche Post shares traded up 0.4% to EUR9.85. They have shed more than 50% of their value over the past 12 months. The Dow Jones Euro Stoxx Industrial Goods & Services index fell only about 38% in the same period.

Deutsche Post expects a 2009 net profit on a higher valuation of put options on Deutsche Postbank AG (DPB.XE) shares, after a EUR1.69 billion net loss in 2008. A put is an option to sell a security at a specified price, usually within a limited period.

Deutsche Post is selling its majority stake in Deutsche Postbank. As of March 1, it held 39.5% in Postbank.

The company April 21 said net profit for the quarter jumped and reported EBIT was slightly positive.

The company, one of the world's largest express and logistics companies, added that it expects the decline in adjusted EBIT to lessen in the second half of the year compared to the first quarter and the expected drop in the second quarter.

Deutsche Post, which competes with the likes of TNT NV (00906.AE), FedEx Corp. (FDX) and United Parcel Service Inc. (UPS), said net profit in the first quarter increased to EUR944 million from EUR383 million on the year.

First-quarter EBIT fell to EUR27 million from EUR539 million a year earlier on non-recurring charges from its U.S. DHL express restructuring. Adjusted EBIT plummeted 42% to EUR312 million due to sapping demand and low volumes as well as high wages in the mail division. Sales for the January-to-March period fell 13% to EUR11.51 billion.

 
   Company Web site: www.dp-dhl.com 
 
   -By Hilde Arends, Dow Jones Newswires; +49 69 29725 506; hilde.arends@dowjones.com