Spanish postal operator Correos is expecting to end 2010 with a loss of more than €150 million dueto the economic recession and increasing competition. Express unit Chronoexprés hope to return to
profit next year, however.In 2008, Correos made an operating profit of €81.3 million on revenues of €2.23 billion andits pre-tax profit fell 28.4% to €107.1 million. Mail volumes dropped 5.2%. This year, volumes aredown about 10% and a further decline is expected in the future.
Presenting the 2010 budget last week to a Spanish parliamentary committee, Correos presidentSixto Heredia Herrera described the budget as “prudent regarding revenues, realistic in terms ofexpenses and moderate in investment spending”.
Correos expects to end next year in the red due to the macro-economic trends and increasingcompetition ahead of full EU postal liberalisation in 2011. As a result of lower revenues andhigher costs, Correos said it expects a pre-tax loss of about €151.5 million next year.
The Spanish postal operator is planning total revenues of €2.1 billion in 2010. This would bea 2.6% drop on this year which will already be lower than 2008. Postal services are expected togenerate about €1.8 billion next year, a 3.2% drop on this year. Costs are expected to rise 1.3% to€2.25 billion in 2010.
The overall Correos Group, including subsidiaries Chronoexprés, Hybrid Mail and CorreosTelecom, expects revenues to fall 2.2% to €2.25 billion next year, with costs rising 1.3%. Thiswould result in a group pre-tax loss of €149.8 million.
Chronoexprés, however, which expects to make a loss this year due to the impact of therecession on the express business, is planning to make a pre-tax profit of €1.1 million next yearthanks to a 2.5% revenue increase and cost control. In 2008, Chronoexprés increased its revenues by3.9% to €144.8 million and made a pre-tax profit of €1 million.
