Post Danmark’s operating profit falls 67%
Post Danmark reported an operating profit after tax of DKK 235m in the first nine months of the year compared with DKK 726m in the same period last year – a drop of about 67%. Profit from operating activities decreased due to heavy volume declines mainly for letters and parcels.
The profit performance has led Post Danmark to maintain the downward adjustment announced in connection with the presentation of Interim Financial Statements for the First Half of 2009. Against this background, the operating profit for the full year is expected to show a marked decline relative to 2008.
In the past twelve months, letter volumes declined by 9% while parcel volumes declined even more sharply. During the same period, it has only been possible to cut expenses by 1.2%, which far from compensates for the huge volume declines for letters and parcels.
“Post Danmark’s expenses are in very large part linked to the maintenance of a reliable distribution network ensuring delivery on a day-to-day basis to households in all parts of the country. Even though we have initiated a wide-ranging rationalisation programme, this has not been enough to ensure a satisfactory operating profit,” said KB Pedersen, CEO of Post Danmark.
The total after-tax profit for the period amounted to DKK 1,709m compared with DKK 666m in the same period last year. This profit increase was due exclusively to the sale of Post Danmark’s ownership interest in the Belgian De Post – La Poste, which was completed in the third quarter.
“During these difficult economic times, we are pleased with the positive influence of the sale of our stake in De Post – La Poste on our profit performance. The sale generates non-recurring income but does not change the fact that we must adapt our company to the heavy volume declines for letters and parcels. Our company must deliver a much better operating profit in order to be able to meet the increased competition in a fully liberalised market,” Pedersen explained.
In June, Post Danmark was merged with the Swedish Posten AB. The merger was completed by the establishment of a joint Swedish parent company, Posten Norden AB.
