Austrian Post yesterday announced a fall in Q1, 2010, operating profits with cost savingsoffsetting a revenue and mail decline and with improving business for its parcels & logistics
division.The group’s operating profit dropped 5.1% to €45.3 million while the net profit declinedslightly by 0.8% to €33.4 million.
The group’s revenues declined 1.6% to €585.6 million. The main factors behind this fall were thecontinuing difficult market environment, ongoing electronic substitution of letters, restructuringof the branch network, and higher parcel volumes marked by continuing pricing pressures. But thegroup was able to reduce operating costs, including through the departure of 912 employees, or 3.5%of the workforce.
“The current business development confirms our outlook for the year 2010 as a whole. We continueto expect that group revenue will decline by 1-2% compared to 2009 but we will be able to maintainan EBITDA margin between 10% and 12%”, stated Austrian Post CEO Georg Pölzl.
The Mail Division’s Q1 revenues fell 1.4% to €348.2 million, mainly due to the ongoingsubstitution of letters by electronic media. This downward trend was counteracted by severalpositive one-off effects, including postal voting in various elections. Letter revenues dropped3.5% but the Infomail business (addressed and unaddressed direct mail items) increased revenues by1.3%. The unit posted EBIT of €64.9 million, a rise of 2.7%, primarily related to efficiencyincreases enabling a reduction in operating expenses and staff costs.
The Parcel & Logistics Division posted a 2.6% growth in revenue to €195.9 million thanks tohigher volumes and its operating profit rose to €4.1 million from €0.7 million one yearearlier.
The premium parcel product segment (parcel delivery within 24 hours) generated revenue of €153.2million in the first quarter, a 4% decline primarily due to the termination of loss-makingtransport logistics operations in Germany. Revenues in Germany, which generates 74% of premiumrevenues, fell 4.3% but actually increased 7% on an adjusted basis. Austria (10% of premiumrevenue) and South East and Eastern Europe (9%) also increased their volumes.
Revenue of the standard parcels segment in Austria developed more gratifyingly, rising by around30% to €40.2 million. The main reasons were organic growth, the increase in mail order businesssince June 2009 as well as migration of parcel volumes from the premium to the standardsegment.
Revenues at the branch network dropped 19.2% to €40.9 million due to restructuring and lowerinternal sales. The business made an operating loss of €2.1 million compared to the previous year’sprofit of €0.2 million.
For 2010 as a whole, Austrian Post expects mail revenues to drop about 3% – 5%, primarily due toelectronic substitution, but forecasts higher parcel revenues as the market improves. Grouprevenues are predicted to drop between 1% and 2%. But the company aims to maintain a stable EBITDAmargin of 10–12% thanks to further cost savings.
