Russian Post announced today a double-digit revenue increase for the first half of 2011 withstrong parcels and express growth, and is investing in network modernisation.
During the first six months of this year, Russian Post revenues increased 16% to RUB 57.4billion (€1.4 billion). In 2010 as a whole, the operator’s revenues rose 10% to RUB 105 billion(€2.6 billion).
The company’s H1 net profit soared more than 20 times from RUB 200 million (€4.8 million) in thefirst half of last year to RUB 4.8 billion (€116.2 million). But this was due to a one-offaccounting technicality, with this year’s compensation for losses generated from socially-orientedservices below net cost reflected fully in the second quarter. By the end of 2011, Russian Postexpects to generate a net profit comparable to last year’s figure of RUB 483 million (€12.1million).
Russian Post’s revenues from postal services, including letters, parcels and express shipments,rose 19% to RUB 24.6 billion (€595.4 million) in the first half-year and by 15% in the secondquarter to RUB 12.7 billion (€307.2 million). Revenues from the parcels business alone increased22% during the first six months. The express business in particular showed strong growth withrevenues up by 34% to RUB 1.3 billion (€31.5 million).
Financial services also recorded good growth with revenues growing 17% to RUB 22.6 billion (€547million) during the first half year and 14% during the second quarter of 2011. This growth wasmainly driven by the delivery and payments of pensions and benefits which can be explained by theabolishment of reduced tariffs for delivery of pensions in 2011. Product sales increased by 7% toRUB 9.7 billion (€234.7 million) for the first half of the year.
Despite these positive results, operational expenses increased by 17% to RUB 12.4 billion(€300.13 million), mainly due to increased costs for rail and air transportation as well as growingfuel costs for the company’s own fleet. Expenses on network maintenance also rose 17% to RUB 7.8billion (€188.79 million) during the same period due to post office reconstruction and planned costincreases on repairs and maintenance of equipment and computers.
The company’s total debt remained stable during the first half-year at RUB 12 billion (€290.4million). At the same time, the postal operator managed to improve the conditions for debtobligations considerably simplifying the internal debt structure.
This year, Russian Post is continuing to successfully implement its investment programme,largely financed by its own means. The capital expenditures amounted to RUB 2.8 billion (€67.8million). Key areas of investment included the modernisation of postal services (RUB 1.2 billion),the development of postal logistics infrastructure (RUB 800 million), purchases of postaltechnology (RUB 300 million) and software (RUB 300 million).
This month, Russian Post announced plans for the construction of a new automated sorting centrein Rostov-on-Don, located in the Southern Federal District of Russia. The Italian company SELEXElsag has won the tender to build the facility as part of the €50 million contract. Theconstruction is due to start in the second half of this year scheduled for completion in 2014. Thenew sorting centre expected to handle over a million letters and parcels daily will serve fourRussian regions including the Rostov region, the republics of Adygeya and Kalmykia and theKrasnodar Territory.
Russian Post is working on developing a national network of automated sorting centres as part ofthe government’s concept to restructure postal services. The sorting centres will allow theoperator to minimise manual work when handling and sorting mail and thus reduce delivery times ofpostal shipments.
In 2009, Russian Post started operating its first automated sorting centre in Moscow and thelargest in Eastern Europe. The facility serves a major part of the Russian Central Region andhandles about 3 million postal shipments a day covering more than 5,200 post offices. In July 2011,another automated sorting centre was opened in St. Petersburg expected to handle nearly 1.7 millionletters and parcels daily and sorting mail for more than 1,700 post offices. Currently, RussianPost is preparing for the construction of automated sorting centres in Novosibirsk and MineralnyeVody.
As part of its modernisation programme, Russian Post is also optimising its logistics andmodernising the network in Kamchatka, a thinly-populated 1,250-km peninsula in the Russian FarEast. It is in talks with the regional administration about using mobile post offices and externalagents for remote areas, and wants to create a regional airline for deliveries across the wholeNorthern Region of Russia’s Far East.
Sergej Zemlyanov, head of the branch network at Russian Post said: “Russian Post is doing itsutmost to effectively develop the postal network. It is very important to us to provide qualitypostal services both for citizens living in big cities and in rural areas.”
