Spanish postal operator Grupo Correos doubled net profits last year to €6.3 million thanks tolarge-scale cost saving measures and despite falling revenues. It has also sealed a four-year pact
with unions.The improved profits last year were largely the result of cost saving measures contained withinthe austerity plan introduced two years ago. Staff costs were reduced by 3.2% in 2010 and externalcosts, including for transportation, dropped by 4.3%. The group’s revenues declined 3.4% to €2.1billion in 2010 following a 4.8% fall in 2009.
The revenue decline reflects lower sales at the main postal business, Correos, which suffered a3.6% drop in sales to €1.97 billion. Its financial result was not disclosed. The postal business,which generates 93% of group revenues, saw mail volumes fall by 4.7% to 4.4 billion pieces lastyear due to the economic crisis, electronic substitution and the growth of competitors ahead of thefull market opening on January 1, 2011. But there were higher volumes for some products, includinginternational parcels and the “Postal Exprés” urgent delivery service.
In 2009, the Correos postal business had made a net loss of €2 million and its revenues fell by4.5% due largely to a 9.6% drop in letter volumes.
Groupo Correos did not announce the 2010 results of its other businesses. In 2009, expressparcel subsidiary Chronoexprés made a net loss of €4.7 million and its revenues dropped 8% to€132.5 million. The hybrid mail business (now Nexea) made a small loss on revenues of €12.8million, while Correos Telecom made a small profit on revenues of €7.3 million that year.
Looking ahead, Grupo Correos said that as part of its 2011-14 strategy it aims to improvefinancial results through a proactive policy of increasing revenues by diversification, gaininghigher market shares in parcels and direct marketing, and gaining a position in emerging sectorssuch as e-commerce. The policy of austerity and cost reduction will continue.
Earlier this month, the Spanish postal group sealed what it described as “an historicalagreement” with unions CC.OO, UGT, CSIF and Sindicato Libre covering the 62,000 employees and civilservants respectively for the years 2009 – 2013. The four unions represent 92% of the group’sstaff. The broad-ranging agreements improve working conditions, give a small 2.3% pay rise to ruralstaff and will reduce temporary jobs. The company will seek 200 voluntary redundancies over theperiod.
Grupo Correos president Alberto Lafuente said: “With these (agreements) we will have a new erain labour relations, which combines the guarantee of workers’ rights with the obligation ofefficient management that is necessarily linked to productivity and business. Therefore, these arealso good agreements for the company because they secure its future viability and thus the futureof Correos and of employment.”
