Good parcels and logistics growth and group-wide cost savings helped Austrian Post to achievestable profits in the second quarter and first half of 2010, the company announced today.
The listed postal operator improved its Q2 operating profit by 5.8% to €29.2 million on stablerevenues showing a slight 0.7% rise. In the first half of 2010, EBIT dropped 1.1% to €74.5 millionand revenues declined 0.5% to €1,150 million.
The Parcels & Logistics division was the main growth driver, increasing revenues by 6% to€191.1 million in Q2 and by 4.3% to €387 million over the first half-year. The business increasedits volumes, gaining new customers, although the pricing situation remained “tense”, according tothe company.
There was a turnaround in the division’s financial results. In the first half of 2010, EBIT roseto €6.1 million compared to the negative results of -€3.4 million in the first half-year of 2009.In the second quarter, EBIT improved to €2 million from the previous year’s €4.1 milliondeficit.
The premium parcel product segment (parcel delivery within 24 hours) generated total revenue of€303.9 million in the first half-year. The 0.3% revenue decline was primarily due to thetermination of loss-making transport logistics operations in Germany.
German subsidiary trans-o-flex, which generates about 75% of premium parcel revenues, increasedH1 revenues by 8% on an adjusted basis, thanks to new customers. The turnaround of the trans-o-flexcompanies in the Netherlands and Belgium continued, the company noted.
In Austria, parcel revenues continued to grow strongly with a 16% increase in the firsthalf-year. In particular, standard parcels increased revenues nearly 30% to €78.1 million due toorganic growth, increased mail-order volumes since last June and volumes shifted from premium tostandard deliveries.
Operations in South East and Eastern Europe returned to growth with an 11.2% revenue increase inthe half-year following a sharp revenue fall in 2009, while the Eurodis alliance added new partnersin Britain and France.
The mail division, which generates the bulk of profits and revenues, saw sales fall only by 0.9%to €682.1 million in the first half of 2010, with a slight 0.4% decline in the second quarter. H1letter revenues dropped 2.8% due to ongoing electronic substitution but direct mail revenues rose1.5% thanks to new business. On balance, the Mail Division improved EBIT excluding employee socialplan payments by 4.5% to €119.6 million, mostly due to lower operating costs. EBIT including socialplan costs was up 3.3% to €118.3 million.
The branch network division posted higher losses and lower revenues. H1 EBIT excluding socialplan costs more than doubled to an €8.7 million deficit, and nearly triped to €11.6 millionincluding social plan costs. Sales dropped 16% to €80 million. Austrian Post is continuing toconvert owned branches into partner agencies. As of end June, 756 of the 1,807 retail outlets wereoperated by external partners.
“We are on the right path, both in terms of the development of our business operations as wellas the implementation of strategic measures,” commented Austrian Post CEO Georg Pölzl. “We havesucceeded in counteracting the revenue decline in the letter mail business for the most part, andexploiting growth opportunities in the parcels segment. Although our cost structure hassubstantially improved it is absolutely essential to continue working on further enhancingefficiency,” he added.
Austrian Post confirmed its original forecasts for the full year 2010. Revenue is expected todecrease by 1-2% but the EBITDA margin will continue to be in a range between 10% and 12%. Mailrevenues will decline but higher parcels & logistics revenues are expected.
* Carl-Gerold Mende, board member responsible for the Parcel & Logistics Division, willleave the company in June 2011. He has decided for personal reasons not to have his contractextended until 2013, the company also announced today. “We respect the personal decision of Mr.Mende. He will continue to carry out his responsibilities with complete dedication and successfullypress ahead with the growth strategy of the Parcel & Logistics Division”, commented PeterMichaelis, chairman of the supervisory board.
