Itella has announced a drop in Q1 profits due to higher operating costs and moderate revenuegrowth. Its logistics business also saw much lower profits.
The Finnish postal group said consolidated net sales for January-March 2008 rose by 3.7% to€447.4 million. International operations represented 26% of net sales following expansion inthe Nordic region and various acquisitions.
But the Q1 consolidated operating profit decreased by 27.5% to €33.3 million, and the EBITmargin dropped to 7.4% from 10.6%. Profitability weakened due to the brisk increase in work forceexpenses resulting from last autumn’s collective labour agreements and Easter occurring in March,the group said.
Itella Logistics, covering its parcels, express, freight transport and contract logisticsactivities, increased net sales by 9.4% to €165.8 million, following the acquisitions of Finnishtransport firm Kauko Group and the Swedish company Hansar Logistics.
But its operating profit slumped 71.7% to just €3 million, which was a 1.8% EBIT margin. Thesharp drop was due to higher production costs in Finland and investments in warehousing in Russia,as well as the effects of the early Easter in March.
