France's La Poste to record EUR 700m profit for 2006

French national postal operator La Poste said yesterday it expected to record a EUR 700 million net profit in 2006, up by about 25% on the figure of EUR 557 million for 2005.

The 2006 operating margin (operating profit on sales revenue) will be around 3.5%, said the group in a statement. La Poste noted that its balance sheet would be hit by an exceptional reform-linked contribution of EUR 2 billion to the national pension financing system at the end of this year.

Internal investment this year on new hubs in Lorraine and Val de Loire and the modernisation of the postal network (1100 offices) reached EUR 1.2 billion, up from EUR 950 million in 2005.

The group spent a further EUR 550 million on acquisitions for its European express network, an increased presence in publishing ventures by its Courrier mail arm and Banque Postale’s move to take over 100% of its asset management activities.

For 2007, La Poste expects to increase turnover by 3%, excluding external revenue growth, and to improve its operating profit margin to 5.8% thanks to cost controls and reform of its pension financing.

Its mail revenues are budgeted to rise 1% in spite of falling volumes, while parcels and express revenues are expected to rise 7% while the Banque Postale aims for 4% growth.

La Poste will invest about EUR 1.4 billion next year, with 11 new hubs and sorting centres planned as well as the renovation of a further 1000 branches.