Swiss Post: PostBus situation impacts 2017 result
Swiss Post has announced that its 2017 result “was significantly influenced by the irregular accounting practices” at PostBus.
In a statement issued today (8 March), Swiss Post said that it made a profit of 420m francs in 2017, compared to 558m francs in the previous year.
As previously reported by Post&Parcel, it has come to light that PostBus received excess compensatory payments between 2007 and 2015 due to irregular reclassifications. As a result, PostBus must now reimburse the claimed amount – 78.3m francs – to the Confederation and cantons.
Swiss Post commented: “The sum of around 78m francs claimed by the audit report of the FOT and a provision for the unrectified situation for the years 2016 and 2017 weighed on the result. Operating profit (EBIT) totalled 630m francs last year, down 74m francs year-on-year. Operating income fell to 7,987m francs. Swiss Post nevertheless managed to record a profit in its core business.”
Besides the issue with PostBus, Swiss Post is continuing to grapple with the challenges that beset its core postal activities.
As the company statement explained: “The market environment for the Swiss Post Group remains challenging: volumes of addressed letters are falling, pressure on prices in the logistics market is increasing and over-the-counter transactions continue to decline. Nevertheless, the result improved in both the letter and parcel markets. The deficit at PostalNetwork was reduced thanks to operational measures.”
Swiss Post added: “At the end of 2017, the number of addressed letters had decreased by 4.2% compared with the previous year’s figure, and the number of newspaper deliveries had also fallen (-2.9%). PostMail is combating this trend with measures such as supplementary services over the “last mile” and succeeded in increasing its operating profit from 317m to 370m francs. This means that PostMail continues to make a very significant contribution to the Group result. Operating income fell to 2,835m francs as a result of declining volumes (previous year: 2,906m francs). However, the fall in revenue was offset by consistent cost management adapted to the relevant situation, the implementation of efficiency measures and one-off effects.”
The bright spot in Swiss Post’s results came, inevitably, from the parcels side of the business. PostLogistics delivered around 130m in 2017, which was up 6.2% on the previous year, and its operating profit was up 2m francs at 119m francs.
However, there are challenges even here because, as Swiss Post explained: “The boom in e-commerce has also resulted in new competitors forcing their way into the increasingly attractive market, significantly increasing the pressure on prices.”
Swiss Post said that it expects parcel volumes to continue growing – hence its decision to invest around 150m francs in the construction of three new regional parcel centers by 2020. The company added that it expects to build more parcel centres in other regions, but “the number of future locations is currently still undecided”.
