Finnish postal operator Itella made an operating loss in the July-September third quarter of2011 due to restructuring costs and other one-off effects but improved its underlying results.
Itella Group’s net sales grew by 5% to €449.4 million in July–September 2011, with higherrevenues in all business areas. However, the group recorded an operating loss of €21.5 millioncompared to the previous year’s operating profit of €4.4 million, representing -4.8% (1.0%) of netsales. The operating result was weighed down by €32.3 million worth of non-recurring expenses, ofwhich restructuring costs expenses related to the cost-cutting programme started in Augustaccounted for €15.7 million and goodwill impairment for €16.6 million. But underlying operatingprofits, excluding non-recurring items, grew to €10.7 million from the previous year’s €6.0million.
The mail division, Itella Mail Communications, increased sales by 2.7% to €262.3 million in thethird quarter, the company’s financial report showed. The division reported an operating loss of€6.4 million while the underlying profit, excluding non-recurring items, dropped to €7.4 millionfrom €9.7 million last year. Over the first nine months of the year, first-class letter volumesdropped 13% while second-class rose 8% and parcel volumes increased 7%.
Itella Logistics increased revenues by 9% to €184.9 million in the quarter and its underlyingoperating result turned profitable, amounting to €3.7 million compared to a loss of €3 million theprevious year. Over the first nine months of the year, the division’s net sales rose by 10.1%, to€541.7 million, with higher sales in all product lines and in nearly all countries of operation.But losses broadened to €21.5 million.
Jukka Alho, President and CEO, said: “The concrete steps aiming to adapt Itella’s operationsto the changes affecting its business environment began in the early autumn. August saw usannouncing the need to boost our efficiency with €100 million. In relation to this, we commencedpersonnel adaptation measures concerning a total of more than 900 man-years. The purpose of theincrease in efficiency is to ensure that we will continue to maintain an adequate level of servicenationally. The realization of these plans has run parallel to the increasingly strong signspresent in the entire European economy of a probable new recession.”
In terms of Itella’s business operations, the most positive trend was evident in Logistics, theoperative business of which was profitable during the third quarter, Alho said. But demand fordomestic postal services remained weak, with the exception of the domestic parcel business.
“It is becoming increasingly clear and unavoidable that we are in a situation where citizensfind changes to the accustomed service infrastructure unwelcome but, on the other hand, the serviceis not considered crucial enough for there to be a willingness to pay for its full costs. From abroader perspective, the state of society at large seems similar: five-day postal delivery, forexample, is considered important, but not important enough to prompt a great amount of eagerness todirect already scarce tax revenue to it. This creates a challenge; tackling it requires vision andcourage. I believe that in the next few years we will see the beginning of a renewed Europe-widedialog in which the demand for traditional postal services will be reconciled with the other modelsof solution offered by the information society. When the time comes, we must decide on the level ofservice that must truly be available everywhere – even in places where increased competition doesnot generate adequate services.”
