France’s La Poste today announced a drop in half-year profits due to lower mail volumes, highercosts and the slowing economy. The group was reportedly also going to present its plan to
restructure into a limited company, paving the way for possible part-privatisation.For the half-year ending June 30, 2008, group revenues increased by 2.3% to €10,556 millionon a like-for-like basis, and excluding the sold aviation business Europe Airpost. Operating costsrose 3.3% due to higher fuel prices, investment costs and other effects. As a result, the operatingprofit dropped 10.9% to €671 million on a comparable basis. The net profit was down 19% at €481million.
Express division GeoPost increased revenues by 8.2% to €1,643 million on a like-for-likebasis and achieved higher profits which were not disclosed. The “satisfactory” performance had beenachieved despite the rapid economic slowdown in markets such as Spain and Ireland, La Postecommented. Growth was driven by cross-border sales which increased by 11% and now represent 18% ofexpress revenues. In addition, GeoPost benefitted from stronger domestic business in Eastern Europeand Germany, as well as the “significant” turnaround of Chronopost.
The separate French domestic parcels operator Coliposte increased revenues by 6% to €685million, driven by e-commerce which now accounts for 11% of revenues. Coliposte’s delivery qualityfor second-day deliveries improved by 0.8 percentage points to 92.4% over the half-year.
The mail business suffered a 0.6% revenue drop to €5,864 million against a difficult economicbackground, La Poste said. The trend to lower volumes increased as large mail customers scaled backbusiness, leaving overall mail volumes down by 2.7% during the six months. The division hasintroduced new savings measures to control costs.
Looking ahead, La Poste said that it would continue to seek acquisitions to grow all itsactivities in the second half of the year. At the same time, it would implement operationalmeasures to ensure it met its financial targets for the full year, although these also depended onthe economic climate, especially in France.
Separately, the news agency AFP reported that some 400 top managers of La Poste were due toattend a meeting on Thursday afternoon to hear the latest status regarding the plannedrestructuring of La Poste from an autonomous public sector organisation into a limited company.This is widely seen as the first step towards a possible flotation of 10-20% of the company’sshares to finance future growth.
A separate meeting of La Poste managers with union officials is due to be held on Friday(August 29) where the two sides will exchange their views on the project, AFP added. The postalunions have so far criticised the restructuring plan and warned of large-scale job losses if itgoes ahead. They are due to meet on September 2 to discuss possible protest actions.
