Finland Post: Declining Letter and Parcel Volumes, Expanding New Businesses

– Net turnover MEUR 796.0 (+7%)
– Operating profit MEUR 29.2 (– 5%)
– Profit MEUR 19.6 (–17%)

Finland Post Group’s net turnover for 1 January–30 September 2002 rose to EUR 796.0 million, up 7 per cent on a year earlier, with Electronic Messaging and Logistics showing the most vigorous growth. The Group’s comparable net turnover grew by 4 per cent. The comparison includes changes in the corporate structure, corporate acquisitions and the changed income recognition principle applied to franking machines.

The Group’s operating profit amounted to EUR 29.2 million, down 5 per cent. Given that the items stated make it more difficult to compare the results, the Group’s comparable operating profit is EUR 0.4 million higher than in the previous year. In addition, the operating profit was burdened by the EUR 6.6 million additional support payment to the pension fund, accrued for the report period.

Messaging Services’ net turnover rose to EUR 596.0 million, up 19 per cent. The net turnover growth was mainly due to the changes in the corporate structure. The comparable net turnover grew by EUR 9.0 million, or 2 per cent. The delivery volumes of letters and direct mail shrank from the previous year. Daytime magazine and paper deliveries met with a favourable development.

Electronic Messaging Services’ net turnover soared to EUR 91.6 million, up 80 per cent, which was largely due to corporate acquisitions abroad. Printing and Document Management performed well. The business area grew by 9 per cent, when reckoning without corporate acquisitions abroad.

Logistics Services’ net turnover fell to EUR 76.9 million, or 41 per cent, as Kelpo Kuljetus Fi Oy, a subsidiary, was transformed into an associated company in September 2001. Reckoning with this change, the comparable year-on-year net turnover of Logistics Services grew by 20 per cent. Corporate outsourcing logistics services showed the most vigorous growth in this business area.

Parcels and Service Channels reported a net turnover of EUR 131.6 million, thus remaining at the previous year’s level. Parcel Services’ net turnover improved by 2 per cent, although the volume of parcels dropped as a result of the flagging mail order business. Inter-company parcel deliveries were on the rise. Other Business Activities (Easy KM Oy, SPS Siivouspalvelut Oy, Postin IT Oy) reported a net turnover of EUR 67.2 million, up 17 per cent. In comparable terms, net turnover decreased by 1 per cent.

The period-end equity ratio was 65.6 per cent (68.4 per cent). Capital expenditure for the period amounted to EUR 81.4 million (EUR 109.1 million), with the acquisition of Eurocom Depora GmbH being the largest single investment made. The average number of Finland Post Group employees for January–September amounted to 23,132 (23,320).

The Finnish economy is not expecting a turn for the better towards the year-end in a way that would considerably increase demand for the services provided by Finland Post. Nevertheless, the Group’s net turnover for 2002 is expected to grow, while profit for the year is expected to improve thanks to a better performance during the fourth quarter.

Furher information:

Interim Report, Key Figures, Net Turnover by Business Sector, Profit and Loss Account and Balance Sheet.

Jukka Alho, President and CEO, tel. +358 20 451 5600, [email protected]
Vesa Vertanen, CFO, tel. +358 20 451 5073, [email protected]