Austrian Post announced today that it managed to limit falls in operating profits and revenue tosingle-digit levels over the first nine months thanks partly to cost saving measures. The group is
meanwhile pressing ahead with plans to transfer excess postal workers to the police force.The privatised postal operator saw revenue drop by 3.2% to €586 million between July andSeptember 2009 and by 3.4% to €1,785 million over the first nine months. Operating profits declined12.8% to €18.3 million in the third quarter and fell 9% to €93.7 million over the nine months.
The dominant mail business continued to suffer from the impact of the recession andcontinuing electronic substitution. The Mail Division’s sales fell 4.6% to €330 million in Q3 anddropped 4.5% to €1,019 million in the first three quarters of 2009. Its operating profit dropped 9%to €49.9 million in Q3 and fell 13.7% to €164.4 million over the first nine months.
The Parcel & Logistics Division saw revenues drop 1.2% to €190.3 million in Q3 and fall2.4% to €561.5 million over the first three quarters. The division made an operating loss of €2.9million in Q3 and an operating loss of €6.3 million over the nine months, including integrationcosts and operational losses of about €3 million applying to Rhenus Life Science, which wasacquired as of July 1, 2009. Rhenus Life Science should generate a positive EBIT contributionstarting in 2010.
A recession-related volume decline was perceptible in all markets. Moreover, price pressurearose in all logistics segments due to excess capacity in the freight and transport sectors,Austrian Post said.
The premium parcel product segment (parcel delivery within 24 hours) generated revenue of€459.2 million in the first three quarters. This 5.4% decline was strongly linked to theinternational freight and express mail business, which suffered even more severely from thecyclical downturn. The subsidiary trans-o-flex in Germany accounts for about 75% of the revenue inthis segment, followed by the growing parcel business market in Austria (9%), South East andEastern Europe (9%) and the trans-o-flex companies in the Netherlands and Belgium (7%). The companyRhenus Life Science in Germany, specialising in the transport and storage of temperature-sensitivegoods, was acquired effective July 1, 2009.
Revenue of the standard parcels segment in Austria developed more gratifyingly, risingsignificantly since June 1, 2009 due to the new customer Hermes. Accordingly, revenue was up 8.4%to €95 million over the nine months, including Q3 revenue growth of more than 20%.
In the post office network, Austrian Post has converted some 140 branches to partner-operatedpostal service points by November 2009. But the planned conversion of 144 further branches has beenstopped on government orders.
The top priority is to implement cost reduction measures as a means of counteracting the lossof revenue, the company said. Various measures have been initiated in order to sustainably cutstaff costs as well as operating expenses. Austrian Post succeeded in compensating for theextensive salary increases in 2009, which were based on the high inflation rate of the previousyear, by taking advantage of employee fluctuation and thus reducing its total staff by more than1,000 employees.
One measure will be to transfer civil servants working for Austrian Post whose jobs have beenlost or are threatened to the federal government and to employ them in the police force. “Thissolution is a significant step in the right direction. We will have the opportunity to give civilservants losing their jobs at Austrian Post new perspectives for the future. Austrian Post requiresa decreasing number of employees due to the ongoing reduction in mail volumes. On the basis of thissolution, we will be able to more effectively deal with the current structural change”, saidAustrian Post CEO Georg Pölzl. “Socially compatible job cuts cost money, but they represent a goodinvestment in the future, and serve to sustainably improve our cost structure,” he added.
In its full-year outlook, Austrian Post said it expected the current economic trends tocontinue having a negative impact on letter mail and parcel delivery volumes. The company aims toreduce costs by at least €30 million this year and generate an operating profit about 10-15% belowlast year’s level.
