Austrian Post: As 2022 progresses, deviation from the prior-year performance is expected

Austrian Post: As 2022 progresses, deviation from the prior-year performance is expected
Austrian Post has reported its  2022 Q1 results revealing  revenue and earnings below prior year as expected. Parcel division in consolidation phase after lockdown momentum of previous years. 

Revenue

  • Revenue decline of 7.1 % year-on-year to EUR 601.4m (–2.4 % excl. Parcel Turkey)
    • Mail –3.9 % to EUR 298.9m
    • Parcel & Logistics –12.5 % to EUR 283.1m (–3.4 % excl. Parcel Turkey)
    • Retail & Bank +49.3 % to EUR 26.4m

Earnings

  • EBITDA –17.9 % to EUR 81.2m
  • EBIT –33.7 % to EUR 39.6m
  • Earnings per share down from EUR 0.71 to EUR 0.46

Cash flow and balance sheet

  • Operating free cash flow of EUR 72.1m
  • Balance sheet total incl. bank99 of EUR 4.9bn
  • Stable equity position of EUR 693.5m

Outlook 2022

  • Targeted revenue level of the previous year (2021 revenue: EUR 2.5bn)
  • H1 below high comparatives of the previous year, targeting for catch-up in H2
  • EBIT 2022 expected in the range between 2021 (EUR 205m) and 2020 (EUR 161m)

The company stated: “As previously announced, Austrian Post achieved a revenue and earnings development in the first quarter of 2022 below the prior-year level. Revenue in the first three months of 2022 amounted to EUR 601.4m, implying a decline of 7.1 % from the first quarter of 2021. This decrease is primarily attributable to the sharp depreciation of the Turkish lira. Excluding the Turkish parcel business (subsidiary Aras Kargo), the revenue decline equalled 2.4 %. Revenue of the Mail Division fell by 3.9 % to EUR 298.9m, in part due to the structural reduction of addressed letter mail volumes but also as a result of the discontinuation of positive COVID-19 effects from special mailings in the previous year. Revenue of the Parcel & Logistics Division was down by 12.5 % to EUR 283.1m, which can be mainly attributed to the depreciation of the Turkish lira. Excluding the business in Turkey, divisional revenue was down by 3.4 %. The Retail & Bank Division developed positively, reporting a revenue increase of 49.3 % to EUR 26.4m.

“The negative revenue development, inflationary trends as well as the pressure on the Turkish lira have also negatively impacted earnings. EBITDA in the first quarter of 2022 fell from EUR 99.0m to EUR 81.2m (–17.9 %) whereas earnings before interest and tax (EBIT) declined from EUR 59.8m to EUR 39.6m (–33.7 %). The Mail Division reported an EBIT of EUR 41.1m compared to EUR 45.5m in the prior-year quarter, whereas the Parcel & Logistics Division generated an EBIT of EUR 17.4m, down from EUR 35.8m in the previous year, primarily related to the exchange rate development of the Turkish lira. The Retail & Bank Division showed an EBIT of minus EUR 10.7m in the period under review, compared to minus EUR 18.4m in the first quarter of 2021 (+41.8 %).

“The war in Ukraine indirectly impacts the business model of Austrian Post as a consequence of intensifying inflation resultant from price increases for energy and raw materials, as well as due to disrupted supply and value chains. Inflationary pressure leads to increases in operating staff and energy costs and also negatively affects consumer behaviour. “Austrian Post is striving to making letter mail and parcel delivery services as cost-efficient as possible by implementing extensive countermeasures. Inflation adjustments will be made on the revenue side,” comments Austrian Post CEO Georg Pölzl.

“As 2022 progresses, deviation from the prior-year performance is expected particularly in the first half of the year. Positive special effects of 2021 caused by lockdowns imply high benchmarks. A catch-up is targeted in the second half of 2022. In spite of the difficult environment, Austrian Post aims to achieve the highest possible level of revenue stability in 2022 (2021 revenue: EUR 2.5bn). However, the underlying prerequisite for this forecast remains broad energy related as well as economic and currency stability in the company’s markets. It is likely that inflationary trends will set in not only in the short term but in the long-term as well. From today’s perspective, Group EBIT should lie in the range of the results reported in the last two years (EBIT 2021: EUR 205m, EBIT 2020: EUR 161m). The ambition of the company is to get close to the level of 2021.

“The planned investment programme with focus on capacity expansion and sustainability of Austrian Post will be continued. Individual investments will be assessed in order to ensure meeting all profitability targets. “We would like to assure our customers that we will be able to maintain our highest level of operational performance and our outstanding service,” CEO Georg Pölzl adds. “In this regard, the conversion of logistics processes to enable climate-neutral delivery plays an important role,” CEO Pölzl concludes.

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