The first three quarters of the 2009 financial year show that the economic downturn has had a negative impact on Austrian Post – with a 3.4% drop in revenue.
Letter mail and parcel delivery volumes are dependent on the overall market development, consumption patterns of the population and advertising expenditures of companies. Many companies are trying to achieve cost savings also in respect to postal costs, which has negative consequences on delivery volumes and prices for Austrian Post.
Accordingly, total revenue of Austrian Post fell by 3.4% in the first nine months of the 2009 financial year, to EUR 1,723.2m. Group revenue declined in the third quarter by 3.2%, to EUR 567.3m. Revenue in the Mail Division decreased considerably, falling 4.5%, which can be attributed to the economic downswing as well as the e-mail substitution of letters.
Similarly, the Parcel & Logistics Division also recorded a drop in revenue (- 2.4%) as a result of recession-related price pressure on an international level. In contrast, the parcel business in Austria developed very positively, registering significant volume growth driven by the new customer Hermes. In the Branch Network Division, lower internal sales reflect the current structural change: prior to market liberalisation, letters are being increasingly picked up from large customers. As a result of these changed customer requirements and the recession-related decrease in mail and parcel delivery volumes, it is absolutely essential to adapt the structure of the branch network and increasingly rely on partner-operated postal service points.
The top priority of Austrian Post is to implement cost reduction measures as a means of counteracting this loss of revenue. Various measures have been initiated in order to sustainably cut staff costs as well as operating expenses. Austrian Post succeeded in compensating for the extensive salary increases in 2009, which were based on the high inflation rate of the previous year, by taking advantage of employee fluctuation and thus reducing its total staff by more than 1,000 employees. Net savings in operating expenses of EUR 12m were also achieved.
In the first three quarters of the 2009 financial year, earnings before interest and tax (EBIT) fell 9.0% from the previous year, to EUR 93.7m. Third-quarter EBIT was down by 12.8%. For the year 2009 as a whole, the current economic environment and the cost-cutting measures implemented by Austrian Post’s customers are expected to continue having a negative impact on delivery volumes of postal services. A fundamental improvement in the overall economic situation is not anticipated at the present time.
“On the basis of the ongoing difficult environment for providing postal services, it is important for me to carry out all possible measures at our disposal, both in terms of revenues as well as reducing costs, in order to optimally cope with this market situation”, said new CEO Georg Pölzl.
Source: Austria Post