PostNL today unveiled lower underlying Q2 profits but slightly raised its full-year outlook after abetter performance in the first half of 2011.
Presenting its first standalone results since the TNT Express split-off, the Dutch postalgroup reported EBIT of €93 million, up from a €5 million loss last year, but underlying EBIT wasdown 33 per cent to €89 million. This drop was largely due to lower mail volumes together withhigher pension and restructuring costs.
The financial results were skewed by the effects from the TNT Express separation. The companybooked a €2.1 billion profit from discontinued operations but also a €397 million impairment on thevalue of its remaining 29.9 per cent holding in TNT Express. The overall net profit, including theTNT Express effect, was €1.7 billion, while excluding this effect it had a €54 million net profitcompared to last year’s €23 million loss.
PostNL’s reported revenues rose 3.2 per cent to €1,024 million in the April – June secondquarter, with underlying revenues up 4.1 per cent at €1,033 million. In the Netherlands, PostNL hadan underlying revenue drop of 5.3 per cent to €577 million and underlying EBIT dropped 52.4 percent to €40 million. Addressed mail volumes fell 8.9 per cent due to electronic substitution and anegative mix effect outweighed the extra working day.
The Parcels Service increased underlying revenues by 10.6 per cent to €146 million andincreased profits by 10.5 per cent to €21 million. Its volumes grew by 10 per cent, partly from newclient wins, and new business initiatives developed well, the company said.
The International business, covering mostly mail activities in the UK, Germany and Italy,increased revenues by 31.8 per cent to €361 million and the underlying loss was reduced to just €2million from €14 million last year. Disclosing country revenues for the first time, PostNL saidthat TNT Post UK increased revenues by 18 per cent to €155 million, due to higher Royal Mailtariffs and higher volumes. The Royal Mail competitor launched a packets and parcel service at thestart of this year and is also working on a plan for a last-mile delivery service, executives toldanalysts.
TNT Post Germany revenues doubled to €121 million due to VAT changes but excluding thiseffect dropped 4.7 per cent due to some customer losses. But the business is on track to break evenin 2013 by restructuring its network and there was a positive finding by the German regulator overDeutsche Post pricing, the company noted. In Italy, TNT Post underlying revenues rose 8 per cent to€48 million with 26 per cent volume growth driven by its Formula Certa product and householdcoverage reaching 58 per cent of the country.
CEO Harry Koorstra said: “There is a positive development of all key parameters: theaddressed mail volumes have developed in line with expectations, the process of consolidation inthe Dutch market continues and the Enterprise Chamber has rejected all requests of the WorksCouncil in their case against the reorganisations and as a consequence, we can now continue ourMaster Plan implementation. Parcels delivers as promised and International’s performance furtherimproved with Germany on track to become profitable supported by a positive outcome of our Germancourt case. Looking at our performance during the first two quarters of the year, I am pleased tosee that we are well on track towards the top half of our guided range.”
For 2011 as a whole, PostNL now expects underlying cash operating income to be at the tophalf of the guided range of €130 – 170 million in 2011. Address mail volumes in the Netherlands areexpected to decline 8-10 per cent this year due to ongoing substitution and competition, and thecompany aims to achieve Master plan savings of €50 – 60 million.
PostNL also stated that it would sell its 29.9 per cent stake in TNT Express “as and whenPostNL deems advantageous and appropriate, in line with the goal to maximise value for PostNLshareholders”.
