Russian Post increased profits last year thanks to rising mail, parcel and express volumes andis launching a network of parcel collection terminals in major cities.
The state-owned postal operator showed strong revenue growth from regulated postal services of12% in 2011 with its operating revenue rising by 14% to RUB 120 billion (€3.1 billion) compared tothe previous year.
In its preliminary financial results for 2011, the Russian postal operator expects a net profitof RUB 700-750 million (€18.1-19.4 million) which is higher than in 2010. Thereby, revenues frompostal services made up 45% of the total operating income while financial services accounted for38% and other goods and services for about 17%.
For the first time in the last several years, Russian Post was able to achieve growth in itsletter business despite the global trend of falling mail volumes. Revenue growth from unregulatedpostal service is expected in the range of 22%, mainly thanks to growing parcel volumes which rosenearly by 10% in 2011 compared to 2010, from 47.8 million to 52.3 million items.
Other unregulated services showing considerable growth are first class mail shipments withvolumes increasing by 81% last year. Such a dynamic development is due to increasing popularity ofthis letter type both with business and private shippers. In addition, the development ofe-commerce and the expansion of Russian Post’s regional network contributed to EMS shipment volumesgrowing from 3.9 million items in 2010 to 4.9 million in 2011.
Revenues from financial services rose by 16% in 2011 boosted by higher volumes of pensions andbenefits and higher revenues from utility bill payments and more than 5,000 additional contractsfor receipt of other payments such as kindergarten and school fees. In 2012, Russian Post plans toswitch their payment receipt to online mode completely as part of its ongoing contracts withintraregional telecommunication companies.
One of the most popular services of Russian Post remains money transfer, with a new urgenttransfer service called ‘Forsage’. The number of post offices offering this service increased from14,000 to 20,000 with transfer volumes tripling in 2011.
Revenues from commercial goods and services increased by around 7% in 2011, mainly due to retailgrowth of 11%, especially boosted by new projects such as ‘Mobile Post’.
In terms of expenses, the labour costs of Russian Post increased in 2011 due to the higherinsurance costs and wages going up by an average of 15% per employee while labour productivity alsogrew by 21%. The company’s investment is estimated at around RUB 8 billion (€206.83 million) spentin 2011 with 62% of this sum allocated for modernisation of postal logistics and facilities.
Russian Post said that overall its preliminary results demonstrate the effectiveness of itsmodernisation policy and the development of new and modern services.
Last month, Russian Post’s express subsidiary EMS Russian Post signed an agreement with Logibox,a national network of automated postal terminals for receiving and handing in shipments. Based onthe Logibox network in Russia, the express operator will start delivery of EMS shipments with thefirst ‘pochtomats’ to begin operating in the first half of this year in Moscow. At the end of lastyear, EMS Russian Post already launched a trial phase with the first two pochtomats in Moscow andSt. Petersburg.
The automated postal terminals will enable customers to pick up their shipments without the helpof postal staff. Such terminal networks are already widely used in Europe, by internationallogistics companies in particular.
Currently, 100 Logibox pochtomats are deployed across Russia of which 25 are deployed in Moscowand St. Petersburg with the aim to automate the last mile delivery for orders by end customers frominternet shops and mail-order companies. The Logibox terminals operate 24/7 while the firstpochtomats of EMS Russian Post in Moscow and St. Petersburg are open in line with the working timesof postal services in which they are installed.
This year, Russian Post plans to continue investing in upgrading its technical and technologicalbases and developing its most profitable activities. In addition, the company will start developinga network of multi-functional centres offering state and municipal services to customers.
At the same time, Russian Post said the possibilities for its extensive development are ‘almostexhausted’. This year, it plans to start implementing its Development Strategy for 2012-2016 andhopes for the clear support of the federal government.
“The state must decide whether Russian Post is purely a state enterprise which would mean thatits modernisation should be financed from the state budget. If the federal postal operator becomesa commercial company, it should be allowed by law to raise independent financial means for its owndevelopment while maintaining the required level of quality and accessibility of guaranteed stateservices,” Russian Post explained.
