Swiss Post is forecasting a sharp drop in profits this year due to the declining mail and logisticsmarket after recording a 9% fall in net profits for 2008.
The Swiss national postal operator closed 2008 with a group profit of CHF 825 million(€539.91million), a 9% fall on the previous year. The operating profit (Ebit) declined by 6% to CHF812 million (€531.4 million). Revenue was up 3% to CHF 8.98 billion (€5.88 billion).
The drop in profits is mainly due to rising transport and staff costs, declining volumes,writedowns and the cut in federal subsidies for transporting newspapers, somewhat mitigated byone-off revenues from real estate transactions, Swiss Post said. However, the profit enables it tocontribute towards the necessary bolstering of its pension fund, to further top up its stillinsufficient equity capital and to pay the Swiss state an adequate share of profit.
In 2009, Swiss Post expects its results to be significantly below last year’s level due tothe economic crisis, the ongoing decline in volumes and increasing competition.
Outgoing CEO Ulrich Gygi told the annual press conference it will be increasingly difficultfor Swiss Post to equal the good 2008 result in the next few years due to falling volumes andincreasing competition. The postal operator is still awaiting proposals for the next stages ofliberalisation, including the issue of how the USO will be financed, he stressed. Above all, SwissPost wants to be free to decide for itself how to provide the USO based on customer and marketdemand rather than “a legal infrastructure contract”, he commented.
In 2008, the PostMail business, faced with a cut in federal subsidies for transportingnewspapers of around CHF 50 million, only partially offset by price adjustments, as well as afurther decline in B-Mail volumes, registered a 3% fall in operating income to CHF 2,916 million.However, as a result of productivity increases and lower payments to the Post Offices & Salesunit following the assumption of delivery services, the unit increased its operating profit by 5.5%to CHF 249 million.
Although the operating income of Swiss Post International fell by 9.7% to CHF 1,034 million,the unit succeeded in boosting its result by CHF 2 million to CHF 36 million. The drop in income isprimarily due to the currently lower exchange rates.
PostLogistics was able to grow its operating income by 3.8% to CHF 1,516 million thanks toinnovative business customer solutions and higher parcel volumes. But its operating profits werenearly halved to CHF 39 million due to higher costs for wages and fuel.
The group unit Strategic Customers & Solutions, which mainly operates outside Switzerlandselling document, dialogue and e business solutions, improved its result to CHF 9 million Swissfrancs from a CHF 1 million loss in 2007. Revenues rose to CHF 708 million despite the impact ofnegative currency effects.
