Norway Post today announced higher Q1, 2010, profits thanks to cost savings and despite arevenue fall resulting from lower mail volumes.
The Norwegian postal operator said its Q1 earnings before non-recurring items and write-downsmore than tripled to NOK 284 million (€35.5 million) from NOK 90 million in Q1, 2009. This wasmainly due to effects resulting from the Spinnaker profitability and cost reduction programme,which has so far had a total effect of around NOK 1.4 billion (€175 million) since its start inNovember 2008.
Operating revenues declined by 3.9% to NOK 6,663 million (€833 million), mostly due to lowgrowth in the domestic and international economy. Revenues from foreign subsidiaries dropped 6% toNOK 1,737 million (€217 million).
“We implemented cost-cutting measures early on and now see that they are helping to strengthenthe Group’s ability to compete in the Nordic market,” said Norway Post’s President and CEO DagMejdell. Employee numbers declined by 2,750 to 23,260 staff at the end of March 2010. Additionalmeasures will be implemented in the Mail, Logistics and IT segments in order to adapt the costs tothe declining level of activity.
Norway Post’s Q1 mail revenues dropped 2.8% to NOK 3,126 million (€391 million) with totalvolumes down 4.4%. But the segment’s operating profits (EBIT) amounted to NOK 308 million (€38.5million), up from NOK 119 million in the same period last year.
Logistics revenues dropped 4.2% to NOK 3,055 million (€382 million) in the first quarter of 2010due to lower volumes and price pressures, although parcel volumes grew. Operating profits improvedslightly to NOK 69 million (€8.6 million) in 2010, compared to NOK 59 million in 2009.
Norway Post also reiterated plans announced in April to restructure its organisation in the faceof the changing market environment. As of June, the existing Logistics Division will be dividedinto two parts, the Logistics Solutions Division and the Parcels and Goods Division. At the sametime, the Distribution Network Division and Mail Division will be merged to form a new MailDivision.
“The new, future-oriented organisation strengthens our parcels, goods and logistics solutions.The Mail Division will be revitalised and equipped to face the challenges of a declining lettersmarket,” Mejdell commented.
