Austrian Post reports strong profit growth in year so far
Austrian Post has reported a “very satisfactory” first three quarters of the year, with growth in parcel and advertising mail volumes more than countering declines in addressed letters. Overall profits grew 13.6% to EUR 78.9m for the nine months up to September, while consolidated revenues grew 4.1%, reaching EUR 1.71bn.
Sales in the mail division increased 4.1% year-on-year to EUR 978.3m, partly thanks to prices increased in May, while growth in parcels and logistics was 6%, rising to a EUR 618m revenue despite pressures from higher transport costs.
While revenues in the post office network fell 4.1% to EUR 112.8m, overall group earnings before tax rose 15.4% to EUR 109.5m.
The third quarter saw group revenue growth of 6.7% year-on-year, to EUR 572m, with earnings before tax up nearly 40% to EUR 28.2m
Austrian Post is now predicting a sales growth of 3.5 to 4% for the full year, and a margin for earnings after tax of 10-12%.
Its CEO Georg Pölzl said new products and pricing were now being accepted by Austrian people, adding momentum to sales.
New ways to bring in self-service operations, such as the trial for apartment owners to receive parcels in community lock boxes, are bringing good reactions from the public, he said, while a service in which advertising mail is bundled together is also proving a success.
“The sales growth achieved in the mail and parcel business shows once again that our strategic positioning is correct and our operational development is proceeding well,” said Pölzl today.
Efficiency
Austrian Post is tackling the challenge of improving operational efficiency to cope with declining letter volumes hit by e-substitution and the economic slowdown, the company said, but it added that investment in improvements and extra capacity also made sense for the long-term sustainability of the service.
The Post is on track to spend EUR 80m to 90m on capital investment this full year, replacing sorting systems with more efficient technology while spending on structural changes to improve operational efficiency.
Sales in the retail network have been declining for a while, with the Post restructuring to provide more postal services out of partner-run counters rather than post offices. In the last year, the number of partner-run outlets have increased from 898 to 1,239.
Labour costs have been relatively stable on a comparable basis to last year, at EUR 817m, with natural attrition seeing staff levels falling by 747 to 23,486 staff total.
Looking forward, Austrian Post said letter volumes would continue to come under attack by internet communications, while the current debt debate in Europe was likely to have a dampening affect on consumer spending, which could have an impact on parcel volumes, though otherwise that market should prove “largely robust”.
