Austrian Post today announced a slight drop in Q1 operating profits due to higher staff costs while parcel growth outweighed lower mail volumes to keep revenues stable.
The postal group reported a 7.4% drop in operating profit to €53.9 million. This decline also included expenses resulting from increased staff-related provisions due to the ongoing low interest rate environment, according to the company.
Revenues increased slightly by 0.6% to €601.9 million. Revenue growth of 2.2% in the parcel segment completely offset the slight decline of 0.3% in the mail business, which continues to be affected by the ongoing electronic substitution of traditional letter mail. In addition, branch network revenue decreased.
“The focus of our strategic activities is on reliability and stability for the owners and other stakeholders of our company, and this approach will be continued in the future,” said CEO Georg Pölzl. “Looking ahead to the full year, we confirm the previously communicated outlook for 2015. We expect a group revenue increase in the range of 1-2%. At the same time, we target an EBITDA margin of around 12% and a further improvement in EBIT.”
Revenue of the Mail & Branch Network Division was down 0.3% to €377.5m due to the ongoing electronic substitution of letters as well as decreasing revenue in the branch network, while its operating profit declined by 1.7% to €76.6 million.
The Parcel & Logistics Division increased Q1 revenues by 2.2% to €224.4m. German subsidiary trans-o-flex, which accounts for 55% of divisional revenues, had a 2.5% drop in revenues due to a challenging competitive situation and price pressure. In contrast, revenue in Austria rose by 8.1%, driven by online shopping and impetus provided by Easter sales against the backdrop of intensive competition. The subsidiaries in South East and Eastern Europe posted a revenue increase of 11.0% on the basis of significant volume increases.
The division’s operating profit totalled €7.2m, comprising an improvement of €1.7m from the prior-year figure of €5.5m, which, however, included higher negative effects such as write-downs and structural measures. The earnings situation in Austria and South East and Eastern Europe was positive, whereas structural changes continue to be carried out in Germany, the company noted.
For 2015 as a whole, Austrian Post expects the Parcel & Logistics Division to achieve revenue growth of 3-6% in the private customer parcel segment driven by the ongoing expansion of e-commerce, depending on the region. The positive development of the business parcel segment depends on a stable economy and competitive situation. However, the subdued economic situation is unlikely to provide any impetus to parcel growth. For this reason, strong competition is leading to enhanced pressure on prices and market shares.
Profitability is the top priority, especially in the company’s international business operations. One focal point is the continuation of the efficiency enhancement programme of the trans-of-flex Group, entailing a reorganisation of process, distribution and staff structures, Austrian Post pointed out.
