Swiss Post records stable profits on “slight” mail volume declines

Swiss Post said today that it had an “excellent result” 2011, although the postal operator saw its already high profitability reducing slightly compared to the year before. The year saw profits fall by 0.7% to CHF 904m ($979m USD) on an operating income of CHF 8,599m ($9,311m).

The company’s operating income was also down on the previous year, by 1.6%, but Swiss Post said this was “mainly” the result of accounting changes.

During the year Swiss Post’s operating profit margin was largely stable, reduced by a tenth of a point to 10.6%.

The company said from its CHF 611m ($661m USD) profits after tax, it would be using CHF 100m ($108m) to further improve its pensions situation, paying out CHF 200m ($216m) as a dividend to the Swiss government.

Among its divisions during the year, Swiss Post said its earnings declined within its mail and parcel operations, but this was countered by improvements in its banking and public transport divisions.

Domestic letter volumes declined by 1.3% compared to 2010 to 2.4bn items, while domestic parcel volumes reduced by 0.9% year-on-year to 107m items.

Looking ahead, the company said it was expecting a “moderate” economic outlook to have a negative impact on its core business mail volumes, but said it was “seizing the opportunities that come with change”.

Communications

Swiss Post’s communications unit, comprising its PostMail, Swiss Post International, Swiss Post Solutions and postal retail network, saw its earnings decline by 18% to CHF 121m ($131m USD).

The company actually saw growth in its letter business as productivity improvements countered a “very slight decline” in letter volumes. Business customers have been moving to more economy options, said Swiss Post, but nevertheless earnings at the PostMail unit increased 5.5% to CHF 210m ($227m USD) on sales of CHF 2,575m ($2,786m), which were down 1.7% on 2010.

Swiss Post International’s results were relatively stable, with sales down 1% to CHF 780m ($844m USD), but earnings up 4% to CHF 51m ($55m). The company said restructuring measures from the previous year had reduced costs to more than offset volume-related income declines.

Swiss Post Solutions – the company’s business services arm – saw its earnings increase from CHF 7m to CHF 11m during the year, on sales of CHF 549m, down 17% on 2010. The results were impacted by the restructuring of international direct mail operations in a joint venture with Austrian Post last year.

Swiss Post’s logistics operations, PostLogistics, was hit by lower parcel volumes, in large part from import parcel processing from Germany, with its operating result down 8% to CHF 151m ($163m USD) on sales that were down 2.6% to CHF 1,439m ($1,558m).

Retail

The retail network at Swiss Post saw its performance in 2011 worsen, with losses increasing 40% to CHF 151m ($163m USD) on sales that were slightly down to ($1,846m)

Swiss Post said the increased losses came from a reduction in bill payment transactions in its post offices and a drop in letter and parcel business at the counter. Non-postal product sales “continued to develop positively”, the company said, adding that it would be continuing its efforts to adapt the post office network to changing customer needs.

Meanwhile, the company’s retail finance operations saw its earnings increasing 3.5% to CHF 591m ($640m USD) on sales that were up 2.6% compared to 2010, to CHF 2,451m ($2,655m).