Post Danmark H1 profits slump as revenues stagnate
Post Danmark saw its profits slump significantly in the first half of 2007 due to stagnating revenues and higher costs. It continues to expect a drop in full-year profits.
The partly-privatised postal operator achieved a net profit of DKK 355 million (EUR 47.7 million) in January-June 2007 compared to DKK 665 million (EUR 88 million) in the same period the year before. The operating profit dropped by 41pct to DKK 436 million (EUR 58 million) against DKK 741 million (EUR 99.57 million) the year before.
“The profit performance was clearly marked by stagnant revenue mainly due to the implementation of changes from the beginning of this year in relation to the subsidy for the distribution of dailies etc. as a result of which it is now paid directly to the media. A range of publishers have therefore decided to develop their own distribution network or to choose other distributors. In addition, revenue dropped for letters, magazine mail and unaddressed mail,” said Helge Israelsen, CEO, Post Danmark.
The domestic parcels business increased revenue, however, to DKK 861 million from DKK 655 million one year earlier. But its H1 operating loss widened to DKK 104 million from DKK 37 million, mostly due to higher transport costs.
Post Danmark’s operating costs also grew following the acquisition of Transportgruppen, new collective agreements in the spring, higher transport costs and the impact of a three-year voluntary early retirement program at Belgian Post, in which it holds a minority stake. Post Danmark said it is pursuing a number of initiatives in relation to production, transport structure and distribution to generate cost savings.
1 DKK = 0.0912605 GBP
