Swiss Post profits down 19% in 2013 under new tax liabilities
Swiss Post took a big hit to its profits from its new tax liabilities on converting into a public limited company, but otherwise achieved a “solid” annual result in 2013, it said today. The company, which remains 100% state-owned after becoming a PLC in June 2013, saw its underlying Group profit fall 19% to CHF 626m (EUR 515m) as it became fully taxed for the first time.
Swiss Post said its earnings before tax in 2013 rose 6% to CHF 911m (EUR 750m).
The company said its operating profit margin increased by six-tenths of a point to 10.6% with good results for the communications division.
Results in 2013 were helped by various acquisitions, including the management services business of Pitney Bowes in the UK, but were also affected by the transfer of international mail activities to the Asendia joint venture with France’s La Poste.
Swiss Post said its results came despite “many and varied” challenges, saying that it intends to continue optimizing costs in order to achieve a strategy of “long-term, gradual growth”.
Dips in the performances of many of its divisions came as the result of a change in the way payments are made within the Group to the retail division.
Swiss Post explained: “The results of the individual Group units were influenced by the transition to a new system for the charging of internal services. From 2013, all internal services are charged at market prices or at full cost, replacing the partial cost approach with respect to use of the post office network. Consequently, PostFinance, Post Logistics and PostMail make higher internal payments for services.”
Communications
The three divisions in the company’s communication market — PostMail, Swiss Post Solutions and Post Offices & Sales — saw underlying pre-tax earnings (EBIT) more than quadruple compared to 2012, up to CHF 238m (EUR 196m).
The growth came despite the 2% fall in addressed letter volumes. Unaddressed letter volumes grew 1.7% in the year as Swiss Post’s Direct Mail Company made acquisitions.
PostMail saw its operating income slip 4% in 2013 to CHF 2.9bn (EUR 2.4bn), while underlying EBIT dipped 6% to CHF 324m (EUR 267m). The decline in results came as the result of the unit’s international business being spun out to the joint venture Asendia, but it was also affected by declining newspaper and addressed letter volumes.
Business services division Swiss Post Solutions achieved growth of 12% in its operating income of CHF 616m (EUR 506m), thanks to the acquisitions of document scanning firm Scalaris AG and the UK management services business of Pitney Bowes. The acquisitions also helped with underlying operating profits, which rose by 66% to CHF 5m (EUR 4m) in 2013.
Swiss Post’s retail unit, Post Offices & Sales, managed to cut its operating losses in 2013 from CHF 307m (EUR 252m) the year before to CHF 91m (EUR 75m), while operating income grew 12%. The improved result came from cost-cutting and higher internal payments for services, with letter volumes in decline.
Other units
Swiss Post’s PostLogistics unit saw its underlying EBIT down 11% to CHF 133m (EUR 109m), affected by higher internal payment rates, but operating income was up 3% to CHF 1.6bn (EUR 1.3bn) thanks to the 3% year-on-year growth in parcel volumes.
Swiss Post’s banking arm, PostFinance, saw its underlying EBIT down 14% to CHF 537m (EUR 442m), as a result of higher internal payments and lower interest from reduced margins. PostFinance saw its cash inflow of CHF 4.3bn (EUR 3.5bn) significantly down on the CHF 9.2bn (EUR 7.6bn) seen in 2012, but the assets of the company’s 2.9m customers rose 8% to more than CHF 112bn (EUR 92bn).
The postal company’s public transport business, PostBus, saw its underlying operating profit down 20% to CHF 28m (EUR 23m), but with the expansion of services operating income grew 4% to CHF 812m (EUR 668m).
