Austrian Post’s operating profits dropped back 8.5 per cent in the third quarter of 2013 due torestructuring costs at German subsidiary trans-o-flex but its parcel businesses in Austria and
South-East Europe continued to grow strongly.The postal group’s Q3 operating profit declined by 8.5 per cent to €33.2 million with highermail profits overtaken by a parcels & logistics loss due to a write-down in the value oftrans-o-flex. Group revenues grew moderately by 2 per cent to €561 million. Over the first ninemonth of the year, revenues grew 1.7 per cent to €1.73 billion and operating profits were 0.4 percent higher at €131.5 million.
The parcels & logistics division presented a diverse picture in the third quarter.Revenues rose 3.6 per cent to €208.5 million but the underlying operating profit dropped from €5.3million last year to just €0.2 million. In addition, Austrian Post booked an impairment loss of €27million on goodwill for trans-o-flex, which dragged EBIT down to a €26.8 million loss.
The German subsidiary, facing strong competition and pricing pressure, is currentlyundergoing a “far-reaching earnings improvement programme” to improve its results. One measure isthe ‘insourcing’ of subcontractors with the acquisition of six important local distributionpartners with 500 employees at key locations to improve cost management and operational synergies,CFO Walter Oblin told analysts today. The goodwill impairment for trans-o-flex for the first ninemonths totalled €84.4 million.
The parcel division’s Germany revenues increased by 1.1 per cent in the third quarter butremain 2.1 per cent lower for January-September after declines of 4.2 per cent and 2.9 per cent inthe first two quarters.
In contrast, the company’s parcels business in Austria is growing strongly, with Q3 revenuesup 7.7 per cent. Nine-month revenues were 9.6 per cent higher on an 8.7 per cent rise to 49.8million parcels. The key driver is B2C volume increases due to online shopping but the company’sB2B market share is also rising fast.
South-East/Eastern Europe revenues increased by 7.2 per cent in the third quarter, leavingthem 5 per cent higher over the first nine months of the year. Austrian Post also disclosed that itpaid €50 million in the quarter for a 25 per cent stake in Aras Kargo. The Turkish parcels company’s volumes are growing at a double-digit rate this year, it noted.
Austrian Post’s domestic mail business profited strongly from a string of elections thisyear which contributed additional revenues of some €14 million. This pushed the division’s Q3revenues up to €353 million and improved operating profits by 24 per cent to €66.9 million.Nine-month revenues rose by 1.5 per cent and EBIT was 8 per cent higher at €209 million.
Looking ahead, Austrian Post CEO Georg Pölzl said: “Based on these results, we can confirmour outlook for the 2013 financial year. Revenue should remain stable or increase slightly, and weare striving to improve EBIT.” The parcel business should continue to profit from growth in theprivate customer segment, whereas the intensive level of competition in the business customersegment is expected to continue, especially in the German market, the company said.
Meanwhile, the contract of CEO Georg Pölzl, which expires on October 1, 2014, will beextended for a three-year period until 2017, with a subsequent extension option on his employmentcontract for a further two years, the company’s supervisory board decided yesterday.
Rudolf Kemler, Chairman of the Supervisory Board, said: “In cooperation with the management,Georg Pölzl has managed to transform Austrian Post into a modern and customer-friendly serviceprovider. His reappointment is thus a clear signal of continuity and a focus on the consistentcontinuation of the company’s successful business strategy. The Supervisory Board is convinced thatGeorg Pölzl will continue to successfully master the challenges posed by the constantly changingpostal market.”
