E-commerce growth, logistics expansion and cost savings combined to generate a 20.9% rise in Norway Post’s operating profits in the first quarter of 2015.
The group’s operating revenues increased by 3.6% to NOK 6,288 million in Q1, 2015, while earnings before non-recurring items and write-downs were 20.9% higher at NOK 231 million. In addition, the sale of Norway Post's stake in Evry ASA was completed in Q1 and produced a gain of NOK 219 million. Net profits improved as a result to NOK 399 million from NOK 142 million last year.
Both the mail and logistics segments have contributed to these improved results, according to the postal group. The logistics segment is expanding strongly in both Norway and the Nordic region while the mail segment improved on its 2014 results despite the continued decline in the volume of addressed and unaddressed mail.
"This shows that Norway Post has made the right moves and restructured in time. Norway Post needs new framework conditions to be able to continue its restructuring work and adapt to new user needs in the future too. So we're looking forward to parliament dealing with the new Postal Act Bill before the summer," said CEO Dag Mejdell.
The logistics segment's earnings before non-recurring items and write-downs in Q1 2015 came to NOK 51 million, NOK 10 million more than in Q1 2014. This is a result of the increase in volume, growth in revenue and positive effect of cost cuts. Logistics revenues, which now account for 61% of group revenues, increased by 5.3% to NOK 4,073 million.
The logistics division covers three business areas: Logistics Norway, Logistics Nordic and E-Commerce. The Nordic operations increased revenues but reduced activity in the oil industry impacted on logistics operations in Norway. Online shopping is continuing to grow and the Group's total e-commerce volume increased by 5% in Q1.
"Norway Post is one of the Nordic region's leading e-commerce players. We see that our customers value a high-quality logistics partner with good solutions. As one of the world's most innovative mail and logistics companies, we will continue to help develop e-commerce for both online shops and consumers," Mejdell commented.
The mail segment achieved earnings before non-recurring items and write-downs of NOK 325 million in Q1 2015, NOK 55 million more than in the corresponding period in 2014. This increase is due to the transition to Post in Shops and lower IT costs, the company said. Mail revenues were stable at NOK 2,648 million while addressed mail volumes in Norway dropped 4.1% in the quarter.
In April, Norway Post's free digital mailbox, Digipost, reached a milestone of more than 500,000 users and this number is expected to increase as more and more public-sector departments start to use this solution. The general rule is that the public sector must communicate digitally with the general population by the end of Q1 2016.
"In our experience, most of the population now know about Digipost and the opportunities that a safe digital mailbox entails. Many people prefer to gather their important documents – from the health authorities, local authority or Labour and Welfare Service – in a digital mailbox. Now this is at last possible using a safe and easy-to-use solution," explained Mejdell.
