Arcandor insolvency impacts earnings

Profit from operating activities (EBIT) from continuing operations rose by €1,197 million to €231 million, year-on-year. In the previous year, this item contained income of €572 million from the state aid proceedings, restructuring costs of €2,557 million and impairment losses of €992 million. In the reporting period, the above-mentioned restructuring costs impacted earnings by €1,242 million. Adjusted for these non-recurring items, EBIT fell by 26.8% to €1,473 million.

The insolvency of Arcandor impacted earnings for the reporting period by a total expense of €247 million. EBIT before non-recurring items has not been adjusted for this charge.

Measurement of derivatives relating to the sale of Postbank had a positive effect on net financial income, which amounted to €45 million – up €145 million from the net finance costs of €100 million recorded previously. The prior-year figure included the interest component of the state aid repayment.

Net financial income also contains a €19 million gain from the measurement of Postbank on an equity-accounted basis. Postbank has informed us that as a result of a random sampling examination conducted by Deutsche Prüfstelle für Rechnungslegung e.V. a correction has been made to its prior-year financial statements which has, in turn, had an effect on the reporting year. Deutsche Post DHL considers this error insignificant and has accounted for it in the gain from the measurement of Postbank on an equity-accounted basis for financial year 2009. Net financial income has been reduced by €25 million as a result.

The profit from continuing operations before income taxes improved to €276 million (previous year: loss of €1,066 million).

By contrast, income taxes fell from €200 million to €15 million. All in all, profit from continuing operations amounted to €261 million, a rise of €1,527 million on the previous year.