Post Danmark saw its profits slump significantly in the first half of 2007 due to stagnatingrevenues and higher costs. It continues to expect a drop in full-year profits.
The partly-privatised postal operator achieved a net profit of DKK 355 million (EUR 47.7million) in January-June 2007 compared to DKK 665 million (EUR 88 million) in the same period theyear before. The operating profit dropped by 41% to DKK 436 million (EUR 58 million) against DKK741 million (EUR 99.57 million) the year before.
“The profit performance was clearly marked by stagnant revenue mainly due to theimplementation of changes from the beginning of this year in relation to the subsidy for thedistribution of dailies etc. as a result of which it is now paid directly to the media. A range ofpublishers have therefore decided to develop their own distribution network or to choose otherdistributors. In addition, revenue dropped for letters, magazine mail and unaddressed mail,” saidHelge Israelsen, CEO, Post Danmark.
The domestic parcels business increased revenue, however, to DKK 861 million from DKK 655million one year earlier. But its H1 operating loss widened to DKK 104 million from DKK 37 million,mostly due to higher transport costs.
Post Danmark’s operating costs also grew following the acquisition of Transportgruppen, newcollective agreements in the spring, higher transport costs and the impact of a three-yearvoluntary early retirement programme at Belgian Post, in which it holds a minority stake. PostDanmark said it is pursuing a number of initiatives in relation to production, transport structureand distribution to generate cost savings.
“We expect the overall profit for the full year to be significantly lower than in 2006. Thiswas already clear after the financial statements for the first quarter, and these expectationsremain unchanged in connection with the interim financial statements”, Israelsen added.
