Spanish postal operator Correos recorded a 28.4% profit drop along with a 5.2% decrease in mailvolumes in 2008 compared to the previous year due to the slowing economy. Parcel subsidiary
Chronoexprés made a small profit.The company’s total revenues amounted to €2.23 billion while net revenues were slightly lowerat €2.14 billion. This equals a 1.6% increase in comparison to 2007. However, Correos’ expensesreached €2.15 billion and grew proportionally faster than the revenues mainly due to the increasein labour costs of 3.9%.
As a result, Correos ended 2008 with an operating profit of €81.3 million. The pre-tax profitdeclined 28.4% to €107.1 million.
Correos said that the company’s financial results reflected the slowing postal activity thatalso affected other European operators. This can be explained by the substitution effect of newcommunication technologies and the increased competition on the Spanish postal market ahead of itstotal liberalisation in 2011, the company added.
In 2008, Correos transported 5.12 billion items reflecting a year-on-year decrease of 5.2%driven especially by the last quarter of the year with a significant drop in volumes from Septemberonwards. This coincided with the first signs of slowing economic activity in Spain due to theglobal financial crisis.
In terms of the shipment types, however, Correos sees an increasing tendency towards morevalue added products and less standard mail. According to this positive trend, the number ofregistered products rose in 2008 compared to 2007, especially registered letters and internationalpriority parcels.
On the one hand, these results confirm that customer demand is shifting towards products andservices of added value and that this segment offers the biggest growth potential. On the otherhand, it can be assumed that this positive development constitutes an exception in view of thedecreasing volumes in postal shipments worldwide, Correos explained.
To reduce its dependency on traditional business, Correos has intensified its initiatives fordiversification of domestic and international parcels as well as its online, postal and financialproducts and services along with the implementation of new value added services.
Chronoexprés, the parcel subsidiary of Correos, increased its revenues by 3.9% to €144.8million last year and made a pre-tax profit of €1 million. This was the result of rigorous economicrestructuring implemented in the last few years. However, its economic activity was also impactedby the drop in domestic demand affecting the whole market, Correos added.
