PostNord suffered a sharp 30 per cent drop in operating profits in the first quarter of 2012 as itsteps up its restructuring programme to cope with declining mail volumes.
The Swedish-Danish postal group had flat revenues of SEK 9,993 million but its operatingprofit dropped 30 per cent to SEK 293 million while net profit fell 39 per cent to SEK 210 million,largely due to restructuring costs. This pushed the operating margin down to 2.9 per cent from lastyear’s 4.2 per cent level, although the underlying margin, excluding restructuring costs, rose to6.4 per cent.
CEO Lars Idermark said: “PostNord is reporting satisfactory results for the first quarter of2012 given the circumstances. Net sales for the group developed on par with last year, andunderlying profitability improved.”
He continued: “2012 is a year of change for PostNord. We are streamlining and implementingcost reductions in parallel with implementing major investments in the business. This is in linewith our strategy to reposition the business to secure profitability within the mail businesses anddevelop the logistics business.”
The group reduced employee numbers by more than 3,000 to just under 39,000 in the quarter.Post Danmark employee numbers dropped to 12,700 from 14,550 in Q1, 2011, while Posten (Sweden)employee numbers declined to just under 17,000 from 18,000 one year earlier, the company’s Q1report showed. Logistics employee numbers rose 250 to 6,400 following acquisitions.
In the mail business, Posten, the Swedish operator, saw operating profits drop 11 per cent toSEK 250 million on stable revenues of SEK 3.9 billion in the first quarter and with a 4 per centvolume decline. Post Danmark achieved a major improvement, more than doubling operating profits toSEK 127 million despite a 4 per cent revenue decline to SEK 2.3 billion and a 10 per cent volumefall. The company expects Swedish mail volumes to decline about 5 per cent this year and Danishvolumes about 12 per cent.
PostNord’s Logistics business increased revenues by 6 per cent to SEK 3.2 billion, largelydriven by acquisitions in 2011. But its operating profit fell two-thirds to just SEK 18 million,leaving it with a thin 0.5 per cent profit margin.
Idermark said: “We are developing the logistics business, and continue to implement ourstrategy to meet businesses’ demand for end-to-end solutions and cross-border capacity. Thelogistics business in Norway is growing steadily, and we are gaining market share. The Swedishbusiness is also developing well. In Denmark, however, we are challenged by tough competition,price pressure and a weak economy. We will be carrying out additional streamlining activitieswithin the business.”
The CEO highlighted the deal to take over Green Cargo Logistics from rail operator GreenCargo. “The acquisition of Green Cargo Logistics gives us a leading position within third-partylogistics in the Nordic region, an attractive and rapidly growing market area,” he stated.
