Poste Italiane improved operating profits by more than 27% last year thanks to its ‘cashcow’ financial and insurance services which offset a decline in the heavily loss-making mail business.
The group announced yesterday that its consolidated revenue grew by nearly 8% to €30.7 billion in 2015, operating profits increased by 27.4% to €880 million and net profits more than doubled to €552 million. Shareholders will receive a dividend of €0.34 per share, representing a high payout of more than 80% of net profits.
CEO Francesco Caio said: “The results have enabled us to propose a significant dividend, rewarding our key shareholder (the Italian government), the institutional investors who took part in our listing, and the thousands of individual Italian savers who purchased Poste Italiane shares last October.
“We are very happy with the work done. With our listing on the stock exchange and these results we have laid a solid foundation for the process of innovation and change that we have embraced.”
Poste Italiane’s growth was again driven in 2015 by the separate financial services and insurance services units.
The financial services unit increased operating profits by 21% to €930 million thanks to lower costs even though external revenue weakened by 3% to €5.2 billion, thus pushing up its already high profit margin.
Insurance services generated an operating profit of €487 million, up more than 17%, while the high revenues, underpinned by payments of policy premiums, rose by nearly 14% to €21.4 billion.
In contrast, the core postal business saw operating losses deepen by 13% to €568 million last year. Total revenues, including significant internal revenues, dropped 5% to €8.2 billion while costs were reduced by 4% to €8.8 billion. External revenues fell by 4.4% to €3.9 billion as mail volumes dropped by 9% and were only partly offset by higher prices.
Last October Poste Italiane launched a transformation plan for the Universal Postal Service, including more flexible services and a new delivery model, with 25% of the population only receiving letters every second day. “The new regulatory framework will enable higher service levels to satisfy customer needs and implementation of the business plan to be fast-tracked,” the company explained.
The relatively small parcels business increased revenues by 3.9% to €600 million last year while volumes grew by 12% to 86 million parcels, driven by growth of e-commerce in Italy. B2C parcel volumes increased from 20 million in 2014 to 29 million, B2B volumes increased fractionally to 33 million but international items dropped from five million to just three million, according to figures presented to analysts.
Looking ahead to this year, Poste Italiane said it will continue to expand financial and insurance services, restructure the postal business and introduce new digital products and services.
