La Poste sees net profits rise 41%
French public postal operator La Poste reported a 41.6% leap in net profits to EUR 789 million in 2006, from EUR 557 million the year before, on the back of strong growth in express and parcels.
Pre-tax profit rose 22% to EUR 949 million, from EUR 777 million in 2005, as revenues grew 4.3% to EUR 20.1 billion from EUR 19.27 billion the year before. Operating margin was up 0.7% to 4.7% in 2006, higher than the 3.5% forecast.
“2006 was notable for a strong rebound in international operations, mainly express but also financial services and mail,” the group said in a statement. “And it was the year of unprecedented internal investment in support of the modernisation efforts implemented by each of the group’s sectors.”
La Poste said it was confident operating margin would continue to rise, to 5.8% for 2007, as reforms to its pension finances impacted positively for the first time this year.
“Activity in the first months of the year (2007) is globally in line with the forecasts and the group is confident in its capacity to attain its objective for operating margin,” La Poste said.
International turnover grew to over EUR 3 billion (15.2% of overall revenues) in 2006. Express revenues were up 15.7% to EUR 2.93 billion due in part to strong growth again in eastern Europe, Germany and the UK.
Parcel turnover rose 7.2% to EUR 1.24 billion as the number of tracked parcels increased to 75% of the total compared to 60% in 2005 and traffic growth was stimulated by the introduction of electronic commerce. Two-day, on-time delivery reached 91%, 2% up on 2005.
Mail revenues were up just 0.5%, though, to EUR 11.3 billion, compared to the 3.4% growth in 2005, which was achieved mainly through price rises. The first year of Banque Postale’s activities – separated from La Poste on 1 January 2006 – saw it increase revenues by 6.3% to EUR 4.58 billion.
Net debt grew 37% to almost EUR 6 billion at the end of 2006, compared to EUR 3.78 billion on 31 December 2005, mainly due to a one-off, EUR 2 billion pension fund payment to the state.
Internal investment was up 29% to EUR 1.136 billion as modernisation work forged ahead. Four new mail hubs opened and work began on 20 others across France, EUR 200 million was spent on renovating parcel depots and sorting centres, and over 1,000 post offices were made over.
External investment reached over EUR 500 million through the acquisition of B2B small parcel firm Exapaq, document management specialist Orsid and asset manager Sogéposte (now part of Banque Postale). Total investment by the group thus increased by 70% to a record EUR 1.64 billion, from EUR 958 million in 2005.
The group said the improved profitability would allow it to continue to increase internal investment and reduce its debt ratio in 2007.
