Austrian Post said today that it expects a significant rise in profits in 2007 from fullconsolidation of German express operator trans-o-flex and is looking to invest up to EUR 350
million in further expansion into the parcels and financial services markets.In 2006, the company increased overall revenues by 2.1% to EUR 1,736.7 million. EBIT improvedby 19.7% to EUR 123.3 million, resulting in an EBIT margin of 7.1%.
Earnings before tax went up 29.3% to EUR 130.5 million, and net profit totalled EUR 99.8million, or earnings per share amounting to EUR 1.43. A dividend payment of EUR 70 million wasproposed.
Revenue in the Mail Division was up 1.6% to EUR 1,311 million thanks to more directmarketing, and the Mail Division achieved an EBIT of EUR 271.6 million. The Parcel & LogisticsDivision improved revenues by 7.2% to EUR 227.1 million thanks to very solid revenue growth ininternational parcels deliveries, and had EBIT of EUR 20.8 million. The Branch Network Divisionrevenue climbed 0.3% to EUR 194.4 million and it generated an EBIT of EUR 11.5 million.
Looking ahead, CFO Rudolf Jettmar told the financial results press conference that thecompany had an estimated EUR 350 million to invest in the next two years to expand its business. Itplanned to invest about EUR 100 million to expand the parcels business in Western Europe, about EUR70 – 80 million in Eastern Europe and a further EUR 50 – 100 million in new mail services.
In its outlook for 2007, Austrian Post continues to expect a stable mail market. The declinein letter mail volumes resulting from the substitution of the traditional letter by electronicmedia will be counteracted by expected increases in direct mail (Infomail Business Area) and in theParcel & Logistics segment (including acquisitions).
Austrian Post said it anticipates that organic revenue will remain constant in 2007, withadditional growth driven by the German specialised logistics company trans-o-flex, which will beincorporated into the consolidated profit and loss statement of Austrian Post for the first time in2007. Earnings before interest and taxes (EBIT) are predicted to be 20% to 25% higher in 2007 thanthe level of EUR 123.3 million posted in 2006.
In the parcels sector, the postal operator admitted that its revenue might decline by EUR 20million to EUR 25 million due to new competition from Germany’s Hermes Logistik and lower prices.But this would be compensated by trans-o-flex, with revenue of about EUR 480 million, and itsongoing expansion in the Austrian B2B segment.
Austrian Post has also been invited to buy a minority stake in its financial servicespartner, BAWAG P.S.K., by the latter’s new owner, the Cerberus private equity group. “Austrian Postsees this as a chance to make a profitable and value-enhancing investment, and, at the same time,to proactively promote a jointly developed offensive business strategy in the field of financialservices. Therefore, the offer is being carefully evaluated,” it stated.
