Finnish postal operator Itella saw group profits drop in 2009 due to the weak demand for servicesas a result of the recession. The logistics business volumes were especially affected.
In 2009, Itella Group’s consolidated net sales fell by 6.8% to €1,820 million. Net salesdeclined by 5.8% in Finland and by 9.0% in other countries. International operations accounted for30% of total net sales. Comparable net sales excluding the impact of the previous year’sacquisitions and divestments shrank by 11.4%.
Consolidated Ebit decreased by 9% to €8.63 million, representing 4.7% of net sales. Animpairment of €10.6 million was recorded on the goodwill of its Russian logistics business ItellaNLC, mainly due to the rise in the discount rate used in the testing of the logistics business.Personnel-related restructuring costs of €29 million represented the most significant nonrecurringitem.
The company’s pre-tax profit dropped from €46.6 million in 2008 to €19.6 million last year.
Itella Logistics, incorporating the group’s freight transport, logistics, express and parcelactivities, recorded net sales of €713.9 million, down 12.2%. Excluding the impact of acquisitions,net sales fell by 22%. Net sales decreased in all product lines except Contract Logistics and inall operating countries except Russia. The unit posted an operating loss of €15.2 million.
Itella Logistics’ performance was negatively affected by the sharp fall in volumes,reflecting the general trend in the industry. Costs from personnel restructuring amounted to €6.2million. Apart from Norway, performance in all operating countries was taxed by the significantdecrease in volumes compared with the previous year, Itella said in a statement. In Finland, parceldelivery volumes decreased by 12%.
The profitability of the mail business, Itella Mail Communication, declined with addressedletter volumes falling by 7%. The unit’s net sales dropped 2.1% to €898.7 million while EBIT fellto €84.5 million from €86.2 million last year. The profitability weakened due to the decrease innet sales, particularly in important key products. Positive developments included the introductionof a new sorting technology and carbon neutral Itella Green delivery services.
Jukka Alho, President and CEO, commented: “In 2009, we focused on building a competitivebusiness for the future and on adjusting operations to changes in demand. Despite the challengingmarket situation, our profitability excluding non-recurring items was nearly on previous year’slevel. Full-year earnings were taxed by significant personnel-related non-recurring costs. In thefinal quarter, our efficiency enhancement measures began to take effect and operative profitabilitystrengthened from the reference period a year earlier. All in all, Itella has emerged from theeconomic slump as a financially sound company. This could be attributed to our healthy cash flow,which remained steady despite the economic turmoil.”
