Poste Italiane seeking postal reforms as profitability slides
Poste Italiane grew its sales in the first half of the year thanks to its insurance business, but profitability slumped under pressure from declining mail volumes. The Italian national postal operator said revenues grew by just over 15% to EUR 15bn in the first six months of 2014.
Net profit fell by 38% compared to last year’s first half, to EUR 222m.
The company said its express courier business achieved positive results in the half thanks to the development of e-commerce, on the back of Poste Italiane’s “comprehensive” integrated logistics and secure payment services.
However, the good performance of the parcels business was not enough to counter the decline in traditional mail and the high level of competition in profitable segments of the postal business.
The company said the performance of the postal sector confirmed the trends seen in the second half of last year.
In response to the decline in the postal business, Poste Italiane is working on improving the quality and innovation of its services in order to regain market share and revitalise its parcel logistics business.
But, Poste Italiane has also begun negotiations with the Italian government to reform the regulations governing the universal postal service, considering the ongoing structural decline of mail volumes and the continuing customer requirements.
The company said defining a new framework that sets a predictable path is a necessary condition for finalising the Poste Italiane business plan in the medium term, to lay out the economic and financial prospects of the company ahead of privatisation.
One particular positive for Poste Italiane in the first half of 2014 was its payment business. The company has now issued 20m credit cares, including 13m prepaid cards, while the number of its transactions have grown by 5% year-on-year to 294m in the first half of 2014.
The company’s digital platform has also brought some positivity, with 23m bills paid through the system during the half, while sales in the mobile phone business exceeded EUR 150m.
Francesco Caio, took the positive from the half’s results, stating the public confidence in the company and its potential to play a key role in the modernisation and growth of Italy in general.
“The development of digital payment platforms, the leadership in the field of savings accounts and insurance premiums, and the widespread presence throughout the country places us as one of the engines for growth and competitiveness for the whole of Italy,” he said.
“It is a great opportunity for the country, but is a challenge that requires a profound transformation in the core publicly-owned company.”