Russian Post records 9% sales increase, but profitability slumps
Russian Post said today its revenues for the second quarter of the year increased 9% compared to the same period last year. The company brought in RUB 31.9bn ($986m USD) in sales in the three months to the end of June, up from RUB 26.7bn ($825m) in Q2, 2011.
However, Russian Post said its net income was RUB 1.4bn ($43m USD), a three-fold decrease on this time last year. The company suggested its profits could be higher if the government agrees to compensate it for losses racked up by its provision of universal Internet connection services.
During the quarter, letter volumes continued to rise, Russian Post said, with the amount of written correspondence increasing by 10% compared to the second quarter of 2011, growing to 400m items.
Income from letter mail grew 16% in the same period, helped by significant volume increases in its First Class services. A 35% increase in First Class volumes compared to the same time last year, to 10.4m items, has brought a 70% rise in revenues for the service.
Parcels volumes are bringing growth for Russian Post, with a 9% boost in revenues during the quarter.
Russian Post has also benefited from an 8% increase in remittances and 5% increase in revenues from the payment of pensions and benefits.
Commenting on its results, the state-owned postal operator said one of the most important factors within the quarter was a 13% increase in its productivity.
“The profitability and efficiency of Russian Post reflects the fact that the federal postal operator carries a significant social burden, and is combining its social mission with a large-scale modernisation funded through its own resources,” the company said.
Russian Post is currently hoping that the government will provide major assistance as it seeks to modernise its network, much of which is relying on outdated equipment and technology.
Russian ministers revealed last month that postal reform legislation should be introduced into the State Duma some time this autumn.
