Reduced tax bill props up Swiss Post profits
Swiss Post improved its profits in 2014 thanks to a reduced tax bill and its cost-cutting efforts, as group sales slipped slightly. The company managed to overcome a 2.5% year-on-year decline in letter volumes and a loss-making post office network to boost group profit by 1.9% year-on-year, to CHF 638m.
Revenue for the year stood at 8.46bn, down 1.4% on 2013, while before the lower tax bill was included, operating earnings (EBIT) were down 11.9% to CHF 803m.
Swiss Post said the drop in its pre-tax earnings was primarily from one-off impacts that increased earnings the previous year.
During the year, the state-owned company invested CHF 443m in its network, 2.2% less than in 2013. The Swiss Post work force grew during the year by more than 500 to 44,681.
The year saw addressed letter volumes fall by 2.5% to 2.2bn items, although unaddressed letter volumes grew by 2.6%.
Parcel volumes grew by to 111.8m items in the year.
Divisions
Within the company’s communication division, its Post Offices & Sales unit made a CHF 100m loss on sales of CHF 1.66bn, the loss around 10% worse than the previous year with mail volumes down along with payment service demand, sales down 2% year-on-year.
However, the PostMail unit saw its operating profit up 3% year-on-year to CHF 334m, on sales of CHF 2.89bn, which was 2.4% down on 2013. The unit benefit from cost-cutting efforts, which offset the reduction in income from mail volume declines.
Swiss Post Solutions saw its operating profit more than double to CHF 12m on sales of CHF 659m (up 7.7%), thanks to significant improvement in business within Germany, the UK and the US.
In the Swiss Post logistics division, the company’s PostLogistics unit saw its operating profit up 6% to CHF 141m, largely due to cost-cutting although parcel volumes rose 1.6% year-on-year. Sales fell by 1.2% to CHF 1.56bn.
Elsewhere, Swiss Post achieved some growth in its passenger transport business, but its financial services arm, PostFinance, saw profits down 29% thanks to the reversal of various impairment charges and because of a deteriorating interest rate situation.
