Norway Post improved profits in the third quarter of 2010 thanks to cost savings and higherparcel volumes which offset lower mail and freight volumes.
The Norwegian postal group’s July-September 2010 revenues dropped 0.7% to NOK 5,342 million,which was an improvement on the nine-month fall of 2.3%. Non-Norwegian revenues fell 2.2% in Q3 dueto the economic downturn in Sweden and closure of the Danish mail business earlier this year.Earnings before non-recurring items and write-downs rose 21% to NOK 245 million while EBITincreased strongly from NOK 145 million last year to NOK 630 million this year.
“The third quarter was characterised by a still hesitant market, although the level of activityincreased throughout the quarter. We still expect the volume of letters to fall significantly andmust therefore continue to adapt our costs to our level of activity,” said CEO Dag Mejdell.
Over the first nine months, the mail division had a 3.4% revenue drop due to a 7.7% fall inaddressed letters. But it improved its EBITDA by 20% thanks to cost savings. As of 30 September2010 the Spinnaker efficiency programme had produced an accumulated effect of NOK 1.7 billion sinceit was implemented in 2008. This programme consists of a number of measures to cut costs andincrease the Group’s revenues.
The logistics division, mostly operating through various Bring-branded businesses, had a 1.3%revenue decline over the first nine months and its EBITDA declined 5%. EBIT has halved to NOK 65million between January and September 2010. These results were mostly due to falling volumes andpressure on prices as well as the transport strike earlier in the year. However, parcel volumesincreased by 3.8%, with increases in both international and domestic parcels, and the group’sonline shopping barometer shows that the volume of online shopping will continue to increase.
Meanwhile, the IT business ErgoGroup has been merged with EDB. Norway Post now owns 47% of thenew company EDB ErgoGroup ASA and has committed to reducing its shareholding to 40% during the nexttwo years. Following the implementation of the merger, EDB ErgoGroup will be accounted for as anassociate company.
