Swiss Post improved operating profits by 29% in the first half of 2013 thanks to a surge in mailprofits but its net profits dropped due to higher taxes following its conversion into a limited
company earlier this year, and full-year profits could end up lower than last year.Describing itself as “on track”, the Swiss postal group highlighted its successful transition toits new legal form as a public limited company but also underlined the need for further costreductions and “market-driven” pricing in response to the challenging market conditions andtechnological change.
In the first six months of 2013, Swiss Post’s revenues dropped fractionally by 0.7% to CHF 4.26billion (€3.45bn). But the adjusted operating profit (EBIT) rose by 29% to CHF 556 million (€450m)thanks to solid income on the financial and investment markets and good cost management. The EBITimprovement was largely due to the mail business and financial services while logistics profitsdeclined slightly.
However, net profit fell by CHF 53 million to CHF 359 million (€290m) because the company is nowfully subject to taxation for the first time following its legal conversion. The tax bill rose toCHF 57 million from just CHF 4 million last year. Since January 1, 2013, the group has beenstructured with a parent company, Swiss Post Ltd, and three subsidiaries, Post CH Ltd (the mail andlogistics business), PostFinance Ltd (the financial services business) and PostBus Switzerland Ltd(the public transport operator).
In the communication market, half-year revenues were stable at CHF 2.6 billion but EBIT tripledto CHF 152 million from last year’s CHF 49 million and the profit margin rose to 5.9% from just1.9%. The improvement resulted from a dramatic reduction in post office losses which fell to CHF 41million from last year’s CHF 147 million.
PostMail revenues dropped by 6.9% to CHF 1.5 billion, mostly due to the outsourcing ofinternational consignments to the joint venture Asendia, but its profits remained stable at CHF 194million, due to lower operating expenses and higher internal payments for services. The volume ofaddressed letters fell by 2.3%, whereas the volume of unaddressed items increased by around 4%year-on-year.
PostLogistics increased January-June revenues by 2.1% to CHF 777 million and parcel volumes rose3.4% to more than 56 million, chiefly as a result of the continuing growth in online business. Butthe unit’s operating profit declined 6.8% to 68 million francs, primarily due to higher internalpayments for services. The logistics market continues to be characterised by stronger competitionand price pressure, both in Switzerland and internationally, the group commented in its half-yearreport.
PostFinance was once again the group’s key profit contributor, increasing its operating profitslightly to CHF 299 million, while sales rose slightly to CHF 1.2 billion. In the passengertransport market, PostBus generated an operating result (EBIT) of CHF 17 million, slightly down onlast year, while revenues rose to CHF 399 million.
Looking ahead, Swiss Post said it expects to record a “good result” in terms of full-year groupprofit but it might be “slightly below” the previous year’s level as challenges posed by themarkets and technological change become tougher.
Swiss Post said it will meet these challenges “by continuing to develop its core business with acombination of physical and electronic components, and by exploiting identified growth options. Itwill also further optimise costs and pursue a market-driven pricing policy”.
