Posten Norden improved operating profits by 61% in the third quarter of 2010 thanks to an upturnin its logistics business and continued cost savings.
The Swedish-Danish postal group reported a 6% drop in Q3 revenues to SEK 9,649 million, whichwas a 1% fall excluding structural and currency changes. Operating profits, however, rose 61% toSEK 450 million due to cost reductions, improving the operating margin to 4.6% from last year’s2.7%.
Over the first nine months, revenues declined 7% to SEK 30,798 million, which was an underlying2% drop. Operating profits were up 28% at SEK 1,243 million, pushing the nine-month profit marginup to 4% from 2.9%. Reported net profits dropped 67% to SEK 970 million, but this was an underlying45% rise when excluding earnings from last July’s sale of the stake in bpost.
CEO Lars G Nordström said: “The third quarter of 2010 was marked by continued economic recovery,primarily in Sweden and Norway, though economic uncertainty prevails in many European countries,including Denmark. The market for communication services is characterised by strong competitionfrom digital alternatives, which is impacting mail volumes negatively, while the economic recoverymarks the logistics market.”
He added: “We are pleased with the efforts we’ve made during the first nine months of the yearto adjust capacity and costs to changed market conditions. Following the merger, synergies havealso been realised according to plan.”
In Q3, the Swedish postal business had revenues of SEK 3,564 million (-2%) but improved itsoperating profit by 30% to SEK 242 million. The volume trend stabilised for Mail Sweden due to theimprovement of the economy, the company noted. “It is important that the cost development for thesebusiness areas continues to address the problem of declining letter volumes, although costs are notexpected to decline to the same extent that they have done to date,” it added.
Mail Denmark saw its nine-month revenues fall due to a continued sharp drop in volume, thoughextensive cost adjustments led to a distinct increase in earnings. In Q3, the Danish postaloperator had revenues of SEK 2,369 million (-14%) and a stable operating profit of SEK 133million.
The Posten Norden Logistics division had flat Q3 revenues of SEK 2,962 million but nearlydoubled operating earnings to SEK 100 million from last year’s SEK 57 million. “The recovery indemand for logistics services, the growth of e-commerce and cost cuts had a positive effect onrevenues and earnings for Logistics,” the company stated.
