Posten Norden yesterday unveiled its first post-merger results showing a significant fall inoperating results but a strong rise in net profits thanks to the sale of the stake in Belgian Post.
The Swedish-Danish postal group, consolidated since July 1, 2009, following the historicmerger of Posten AB and Post Danmark on June 24, 2009, made a capital gain of SEK 2,002 million(€195.6 million) in the third quarter from Post Danmark’s sale of its share in Belgian Post (DePost-La Poste). This boosted the Q3 net profit to SEK 2,198 million from SEK 388 million and thenine-month net profit to SEK 2,906 million from SEK 2,100 million, the pro-forma results showed.
The Q3 operating results, which do not include this financial gain, showed operating profitsdown 51% at SEK 279 million on revenues of SEK 10,222 million (-4.2%). Over the first nine months,revenues dropped 2.2% to SEK 32,997 million and operating profit declined 61% to SEK 969 million.The Q3 operating profit margin dropped to 2.7% from 5.3%, and the nine-month margin declined to2.9% from 7.3%.
Posten Norden said the merger of the Swedish and Danish businesses is going ahead “fullsteam” and the creation of the new group has progressed very quickly, although more hard workremains. At the same time, the new company is working on comprehensive cost reduction measures inresponse to lower sales.
CEO Lars G Nordström stated: “In order to rapidly achieve economies of scale, capturesynergies and attain uniformity in the prevailing economic situation, we have initiated anintensive effort to join the businesses and to formulate a joint scorecard and long-term strategy.We share a distinct goal: Posten Norden will be the most competitive operator providingcommunications and logistics solutions to, from and within the Nordic region.”
Addressing business trends, he commented: “Since the autumn of 2008, we’ve witnessed a globalcrisis that has impacted most industries and markets. Posten Norden’s business has been affected,for instance, by the industrial sector’s slumping demand for logistics services and the stepped-uptransition to electronic communication within the financial sector. It is also evident that thedistressed market situation has so far resulted in plummeting demand and a sharp decline inprofitability for operators within our industry.”
The largest of the four new divisions, Mail Sweden (Posten AB) saw Q3 revenues drop 5.1% toSEK 3,564 million and its operating profit decline 22% to SEK 186 million. Over the nine months,revenues were down 5% at SEK 11,535 million and operating profits dropped 29% to SEK 674 million.Volumes declined due to the recession and more customers switched to electronic communication,mostly in the banking and financial sectors.
Mail Denmark (Post Danmark A/S) reported a 1.2% revenue increase to SEK 2,855 million in Q3,but this was an 8% decline excluding currency effects. Its operating profit dropped 35% to SEK 133million. Nine-month revenues were up 4.1% at SEK 9,789 million (-10% excluding currency effects)and operating profits dropped 50% to SEK 513 million. Priority mail volumes declined sharplyalthough the slower C class letters business had higher volumes.
The Logistics division, covering the group’s parcels, express and other logistics activities,had a 6.7% drop in Q3 revenues to SEK 2,937 million but operating profits rose 39% to SEK 51million. Over the nine months, revenues dropped 2.2% to SEK 9,320 million (-11% excludingcurrency and structural effects) and there was an operating loss of SEK 46 million compared to theprevious year’s SEK 166 million profit.
Parcel, pallet and express revenues dropped to SEK 1,137 million from SEK 1,249 million inthe third quarter and other revenues fell to SEK 1,800 million from SEK 1,900 million. Volumes havefallen and there is strong pressure on prices, the company noted in its interim report. Losses wereattribuable to Danish operations and Norwegian operations showed ”very positive” results, it added.
