State aid repayment pushes bpost €57.4m into the red
Belgium’s bpost reported a EUR 57.4m loss today within its latest annual results, thanks to its requirement to repay EUR 291m in state aid back to the government. But while its results other than the European Commission-ordered repayment were generally favourable, the postal operator warned that a worsening in its mail volume declines could point to early signs of an impact from the troubled European economic situation.
The company, in which the Belgian state has a controlling 50% share with private investor CVC Capital Partners holding a minority 50% share, saw its turnover during the year grew 2%, to EUR 2.36bn.
bpost said it would have seen a EUR 227.1m net profit for the year were it not for the state aid repayment, which would have been a 9.4% improvement on the previous year.
The company said its adjusted profit growth was thanks to its operating cost control and the growing success of new products – particularly its new European license plates business and the sound development of foreign subsidiaries.
The improvements offset the financial impact of a 2% decline in addressed mail volumes, a decline rate double that seen in 2010, though half the decline suffered in 2009.
But bpost also revealed that so far in the first quarter of 2012, it has seen its mail volumes declining even more, at a 3% rate.
Caution
Johnny Thijs, the bpost chief executive, said there was a need for “great caution” in 2012 as a result.
“We’ll see if the trend continues, but in any case, we are continuing to work on tight cost control and the strict implementation of our transformation programmes.”
Thijs said of the 2011 results that his company could be satisfied with its performance, extending its upward trend in operating results “despite the first signs of economic crisis”.
He said of the requirement to repay EUR 291m in state aid to the Belgian government: “The European Commission decision regarding the reimbursement to the Belgian State was an unpleasant surprise and had an impact on the bottom line, but only in 2011.”
The European Commission decided back in January that bpost had been “overcompensated” by the Belgian government for its public service mission from 1992 to 2010.
Looking ahead, bpost is now awaiting European Commission approval for its fifth long-term postal services contract with the Belgian government, covering 2011 to 2015. The decision is expected at some point this year.
“The contract, which includes the provision of services of general economic interest, is of paramount importance for bpost,” said Thijs.
