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Austrian Post earnings up in Q1 with letter division growth

Wednesday, May 16th, 2012

Austrian Post has seen some good revenue growth in both letters and parcels revenue in the first quarter of 2012, despite a “subdued” economy.

Overall turnover increased 6% to EUR 605.7m for the quarter, with the company revealing that is newly-restructured Mail & Branch Network division saw sales growing by 6.2% to EUR 385.0m.

This even beat the 5.9% growth rate seen in the EUR 220.8m parcel and logistics revenue.

Earnings before tax for the group was up to EUR 55.8m for the quarter.

The quarter saw an additional working day compared to the same period last year, affecting some of the growth, but Austrian Post said new requirements on the way information is sent to customers by the finance, telecoms and energy sectors has also had a positive impact on mail volumes.

These volume increases more than countered the ongoing switch of Austrian customers to digital communications during the quarter, the Post said.

Georg Pƶlzl, the Austrian Post chief executive, said it had been a good start to 2012, but said his company had to keep working to improve efficiency.

“We cannot compensate for the ongoing trend towards declining addressed letter mail volumes only by increasing the number of parcel shipments,” he said. “Improving the efficiency and cost structure is just as important for the success of the company as optimising service quality on behalf of our customers.”

Divisions

Austrian Post merged its mail division with its branch network from the beginning of 2012.

During the quarter, Austrian Post said its letters division was also helped by changes made in the company’s product portfolio, which shifted more direct mail items up to more premium services, while more e-commerce packages are being sent classified as letters, rather than parcels.

Within the division, letters specifically saw a 13.3% increase in revenue to EUR 205.2m within the division. Direct mail revenues actually saw a slight drop in revenue to EUR 109.7m for the quarter as volumes were transferred into letters services, and with an anticipated shift of seasonal advertising campaigns from the first into the second quarter of the year.

Austrian Post’s parcel division growth was led by its domestic operations, but there was also good development in Germany, the firm said. Parcel earnings before tax were up 46% compared to the same quarter last year, to EUR 7.6m.

The company’s premium express parcels services, generally used in the business-to-business area – saw a 4.1% increase in revenues in the first quarter, to EUR 169.4m, dominated by German subsidiary trans-o-flex. Standard parcels revenue rose by 7.2% to EUR 43.6m for the quarter.

The sale of Austrian Post’s trans-o-flex operations in Belgium and Holland in March did not impact on the results to a large degree, but excluding those operations, Austrian Post said its Parcel & Logistics division would have seen 6.6% growth in revenue for the quarter, rather than the actual 5.9%.

Austrian Post’s operating costs increased during the quarter, with non-labour costs up 4.4% to EUR 190.9m thanks to higher fuel costs and the structural transformation of the post office network, while labour costs rose 6.6% in the quarter to EUR 284.4m.

The Post saw its workforce reduce in size by 268 compared to the same quarter last year, to a total of 22,998.

Source: Post&Parcel/Austrian Post

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