Strong improvement in results and profitability for Norway Post

Norway Post’s earnings before taxes for the first nine months of 2004 were NOK 693 million, up NOK 632 million compared with the same period last year. The improvement is a result of both revenue growth and cost savings. This is the best result per third quarter since the company's establishment in 1996. Profitability is also good with a 19,1 per cent return on capital employed.
”The improvement continues in the third quarter, showing that we have succeeded in improving profitability and developing competitive products and services. When, in addition, the return on capital employed is good, we are pleased to be able to say that profitability is at a satisfactory level,” says Norway Post’s Chief Executive, Kaare Frydenberg.

Growth in revenues
Norway Post’s revenues for the first nine months of 2004 were NOK 12 787 million, an increase of 12.4 per cent from the same period last year. Adjusted for acquisitions and disposals of operations, the revenue increase is 4.2 per cent. The strongest growth occurred in the Logistics business, mainly as a consequence of the acquisition of Nor-Cargo AS. Revenues from communications products are also increasing, whereas revenues from IT have declined due to disposal of operations and reduced sales to the parent company.

Letter volumes declined by a total of 2.5 per cent, with A and B letter volumes 6.4 per cent lower than in the corresponding period last year. Parcel volumes in Norway continue to grow, one of the reasons being increased e-commerce, and are now 3.9 per cent higher than in 2003. The number of bank transactions was 4.4 per cent lower than in the first half of 2003, whereas revenues from sales of Postbanken’s savings and loan products increased by 15 per cent.

Good returns
Earnings before interest and tax (EBIT) for the first nine months of 2004 were NOK 737 million, compared with NOK 81 million for the corresponding period last year. EBIT before non-recurring items was NOK 841 million, which is NOK 737 million higher than a year ago.

Earnings before tax for the first nine months of 2004 were NOK 693 million, compared with NOK 61 million for the corresponding period last year. The return on equity for the last 12 months was 14.7 per cent, which meets the owner’s requirement of 10.8 per cent. The return on capital employed (ROCE) for the last 12 months was 19.1 per cent, compared with 3.3 per cent last year.

Norway Post’s workforce comprises 21 124 full-time equivalent positions at the end of the third quarter 2004, down 966 positions from the third quarter last year. The parent company workforce was reduced by 1 568 full-time equivalent positions compared with the same period last year. The increase in the subsidiaries' workforce relates to the acquisition of Nor-Cargo.

More satisfied customers
The quality of Norway Post's products and services is higher than ever. Delivery quality measured in percentage of A-priority mail delivered the next day, remains record-high, with 88.9 per cent in the third quarter, up from 88.3 per cent in the corresponding period last year. Norway Post’s service has improved through increased accessibility, reduced queues at post offices, and an expansion of its sales network. During the first three quarters of this year 30 new Post in Shops were opened. The company’s sales network currently consists of 329 post offices and 1193 Post in Shops, in all 1522 sales outlets.

A customer survey carried out by Norway Post in the third quarter this year, indicates that the customers’ satisfaction with the company’s sales network is increasing, both in regards to post offices, Post in Shops and customer service. The customers are particularly satisfied with Norway Post’s accessibility, longer opening hours and employee’s service-mindedness.