Interim accounts for Norway Post for 2002
The Norway Post Group's interim accounts for 2002 show a pre-tax loss of NOK 106 million. Revenues from addressed letter mail fall significantly. Extensive processes of change provide permanent cost reductions of a billion NOK, while quality and service are better than ever.
The result for Norway Post shows a pre-tax loss for 2002 of NOK 106 million. Underlying operations have shown positive trends throughout the year. The operating result, before one-off effects in the 4th quarter was positive, at NOK 78 million, while extra allocations of NOK 104 million have been made to cover costs of the process of change. This turned the 4th quarter result, following the one-off effects and financial costs, into a loss of NOK 40 million.
The result is marked by the fall in revenue from addressed mail of NOK 562 million, or 9.2 percent. This trend is a result of the transfer to electronic alternatives that is moving faster in Norway than in the rest of Europe. This applies especially within the banking and financial sectors and in public sector case processing. Revenues from the sales arm of the Consumer Division decline by 4 percent, of which the greatest decrease is in sales of the services of the Post bank. Packages and logistics activities contribute with a growth in income of 11 percent. ErgoGroup is growing by 21 percent and is doing well in a difficult market.
Work on changing and making Norway Post more efficient has been given priority, yielding annual cost reductions of NOK 1,022 million last year. In pace with the efficiency measures, the costs to the State of its purchase of unprofitable postal services have been more than halved over five years, falling from NOK 623 million to NOK 305 million.
The changes have led to employee reductions in the parent company of 1,804 man/years. At the same time, the workforce in the subsidiaries has increased by 798 man/years. In all, the parent company has downsized by 6,000 man/years over the past three years.
"We are moving in the right direction. We have carried out considerable processes of change and our operations are more efficient," explains CEO Kaare Frydenberg at Norway Post AS. "The process of change is continuing, at the same time as Norway Post is investing offensively in the development of new communication and logistics solutions that will contribute to growth and positive profit trends in the long run."
Investing in new growth
In 2002, Norway Post posted a turnover of NOK 15,167 million, a growth of 1.1 percent over 2001. The parent company posted a reduction in revenues of 3.5 percent, and is now responsible for a steadily decreasing share of the Group's turnover. The parent company contributed 79.4 percent of the Group's turnover in 2002, compared with 83.2 percent for the previous year.
In order to contribute to development and growth in the long term, Norway Post is renewing and preserving traditional areas of revenue, at the same time as new products and services are being developed. Norway Post is investing ever more in electronic solutions in order to be able to offer combinations of physical and electronic products like eLetter and eInvoice, as well as solutions that integrate the three streams: product flow, information and settlement.
Internationally, Norway Post is following a niche strategy in the Nordic region. In 2002, revenue from international investment increased by NOK 373 million, or 52 percent, and makes up 7.2 percent of Norway Post's total turnover. The largest investments outside Norway are: City Mail Sweden, Transport Systems International (TSI), and Pan Nordic Logistics (PNL).
Improved quality and service
Norway Post's quality, service and availability are better than ever. Delivery quality for A (first class) post in 2002 was 86.7 percent delivered next day, an increase from 86.3 percent the previous year — and well over the licence requirement of 85 percent. In the fourth quarter of 2002, quality reached record levels at 88.3 percent, an impressive 3.3 percentage points above the year before.
The major change in the Norway Post sales network has, in 2002, created 101 more sales outlets than the year before. At the end of 2002, the sales network consisted of 1,146 Post in Shops, 24 business centres and 304 postshops/post offices. 589 post offices have been closed and Norway Post has now completed its post office closures.
