Finland Posts net sales continue to grow

Interim Report for April–June 2006

Consolidated net sales for Q2/2006 improved to EUR 376.0 million over the same period a year ago (EUR 313.4 million in Q2/2005), up by 20%, company acquisitions and organic growth accounting for 17% and 3%, respectively.
Consolidated operating profit declined to EUR 15.1 million (EUR 22.5 million), representing 4% (7%) of consolidated net sales. Profit before tax came to EUR 15.8 million (EUR 24.0 million).
Net sales reported by Messaging remained steady. The business group’s profitability was eroded by a fall (6%) in 1st class letter-mail volumes and an increase in delivery labour costs.
Information Logistics’ net sales showed favourable developments in all of its product groups, with the exception of Germany. However, price competition remained fierce.
As a result of acquisitions in 2005, Logistics reported strong growth in its net sales.

President & CEO Jukka Alho:

‘Following the acquisition of the Norwegian Universal Spedisjon AS, Finland Post is now one of the leading logistics operators in Northern Europe. For the first time ever, logistics services have accounted for a larger share (33 per cent) of our net sales than our traditional letter mail business (28 per cent).

FinlandPost also strengthened its position in the Finnish logistics market by buying the regional transport business from Kelpokuljetus. This means that we now own an unbroken chain of mail transport from sorting terminals to delivery post offices and customers, leading to growing staff numbers in Finland and supporting our letter and magazine/newspaper delivery businesses as well as logistics services.

The transformation of conventional postal operations is still underway. 1st class letter-mail volumes will continue their downward trend because customer demand is shifting towards lower-margin letter mail and electronic data interchange. This intensifying trend is seeing consumer invoices and bank statements go electronic.

FinlandPost’s business as a whole developed favourably during the first half. Our consolidated net sales have grown strongly and will continue to grow in the second half. We also posted an operating profit in line with our targets, in spite of cost and price pressures.’

FURTHER INFORMATION
President and CEO Jukka Alho, tel. +358 (0)20 451 5600, [email protected]
CFO Tuija Soanjärvi, tel. +358 (0)20 45 20907, [email protected]

You will find the interim report here.

ATTACHMENTS
Interim Report
Presentation
Financial Statements