Norway Post sees Q3 revenues fall
Norway Post’s operating revenues fell to NOK 16.45bn ($2.81bn) for Q3, a year-on-year drop of NOK 363m ($67.3m). However, the company’s earnings before non-recurring items and write-downs increased by NOK 146m ($25m) to NOK 644m ($110.4m) due to cost-cutting measures.
Commenting on the results, CEO Dag Mejdell said: “The third quarter was characterised by a still hesitant market, although the level of activity increased throughout the quarter. We still expect the volume of letters to fall significantly and must therefore continue to adapt our costs to our level of activity.”
As of 30 September 2010 the Spinnaker efficiency programme had produced an accumulated effect of NOK 1.7bn ($291bn) since it was implemented in 2008. This programme consists of a number of measures to cut costs and increase the Group’s revenues.
The agreement to merge ErgoGroup AS and EDB Business Partner ASA was approved by the Norwegian competition authorities in September and implemented with accounting effect on 30 September.
Norway Post owns 47% of EDB ErgoGroup ASA and has committed to reducing its shareholding to 40% during the next two years. Following the implementation of the merger, EDB ErgoGroup will be accounted for as an associate company. The Group otherwise consists of the Mail segment and the Logistics segment.
In that ErgoGroup is no longer consolidated into the Group, the number of employees in the Group was reduced by 3 677 full-time equivalents in the third quarter. Compared to the same period last year, the number of employees in the rest of the Group was reduced by 793 full-time equivalents, 484 of whom related to discontinued operations. The Group had 19,480 employees as at 30 September 2010.
The overnight delivery quality of A-mail was 87% in the third quarter 2010. Despite a hard winter, airports that were closed at night and start-up problems at the South East Norway terminal, Norway Post has met five of the six licence requirements by a good margin in all the quarters so far this year. All six licence requirements were met in the third quarter.
The total volume of A-mail and B-mail declined by 7.7% compared to last year. Industries such as the banking/finance, telecom and insurance industries, which are increasingly using electronic communication, account for the greatest decline. The volume of unaddressed advertising grew by 6.1% compared to last year.
However, in line with global trends, the total parcel volume increased by 3.8% compared to the corresponding period last year. Both international and domestic parcels contributed to the increase in volume. Norway Post and Bring’s online shopping barometer shows that the volume of online shopping will continue to increase.
