Austrian Post buys into Romanian postal market
Austrian Post has entered the Romanian postal market, with the acquisition of a 26% stake in Bucharest-based direct mail specialist PostMaster S.r.l., for an undisclosed amount. The company said the move was a further step in its growth strategy following on from its growth into the Hungarian, Slovakian and Croatian markets, adding that the Romanian postal market is the largest in the Central and Eastern European region.
Austrian Post, which has the option to increase its shareholding in PostMaster to 100% over the next two years, is eyeing a share of the Romanian postal market when it opens up to competition in 2013 to comply with European postal law.
PostMaster was started up in 2007 by two direct marketing industry entrepreneurs, basing its core business on direct mail deliveries weighing more than the 50g per piece – particularly catalogues – along with unaddressed mail.
It has about 100 full-time employees and another 1,500 subcontracted delivery agents, covering about 95% of the country via 45 local offices, and delivering to about 7m households.
Last year, the company delivered about 100m unaddressed and 13m addressed items, generating a revenue of EUR 6.7m. Austrian Post said expectations were for revenue to grow by more than 30% in 2011, to about EUR 10m.
The company said in a statement: “The company has established a good starting position for the upcoming postal market liberalisation in Romania as of the year 2013, and thus a solid basis for future growth.”
PostMaster said its new shareholder would bring the expertise it has gained in “more mature” markets, along with innovative new products and the financial strength needed for future development.
Meanwhile, the government in Romania is considering selling off a 34% stake in Romanian Post, as it prepares for postal liberalisation, with Austrian Post said to be one of those being courted for investment.
Local media in Romania reported last week that a government document revealed the plan, which would leave the government with a controlling stake, though reduced from its current 75% holding. The Property Fund, an independent fund set up by the government to compensate property loss during the communist regime, would most likely reduce its 25% stake to 15% or less.
Communications minister Valerian Weather has written to national postal operators in Austria, Belgium, and Germany to seek out potential interest. Belgium’s bpost is a current frontrunner for a minority stake.
The plan would mean a fresh injection of investment capital in an organisation that made a EUR 29m loss on its EUR 328m turnover last year.
Romanian Post has about 35,000 employees and a retail network with 7,100 post offices.
The Post’s president, Daniel Neagoe, said last week that his company was now seeing its economic situation improving following a series of efficiency-boosting and cost-cutting measures.
Reorganising the domestic postal network by merging nearly 6,000 postal districts, along with the termination or suspension of “unsustainable” contracts has helped cut costs.
It is also looking to grow revenues with a repositioning in the market, thanks to introduction of new financial products.
Neagoe said: “Returning the company to profitability was only a matter of time as a result of extensive restructuring measures we have taken, which have culminated in the reorganisation of the postal network and a reduction of management positions, as well as the launching of new lines of business.”