Profitability “unsatisfactory” says PostNord chief after second quarter loss
Scandinavian postal operator PostNord made a slight loss in its latest quarter, as the company implemented a new organisational structure. The parent company of Sweden Post and Post Danmark — owned jointly by the Swedish and Danish governments — has been suffering sharp falls in its mail volumes as customers digitise their communications.
And, the firm has found growth hard to come by in the parcels industry up against such intense competition.
However, the SEK 76m (EUR 8.3m) net loss recorded in the second quarter of 2014 was a slight improvement on the SEK 86m (EUR 9.3m) net loss made in the same quarter last year.
Net sales for the three months up to the end of June were stable compared to last year’s second quarter, up less than a point to SEK 9.82bn (EUR 1.07bn) with the slight growth down to acquisitions in the logistics business.
Håkan Ericsson, the PostNord president and CEO, said the company’s reorganisation, launched at the beginning of April, was “progressing well”.
Ericsson said cost savings achieved in the restructuring will be seen in the second half of 2014.
“Unsatisfactory”
But, the PostNord boss was not satisfied by the profitability within the Group.
“Profitability remains at an unsatisfactory level, and additional cost savings are required to improve earnings and create greater financial value,” said Ericsson.
“To succeed in this, it is essential to adapt postal-specific regulations to changes in customer demand. We welcomed the new Postal Act in Denmark, enacted early this year, and we are engaged in an active dialogue in Sweden to achieve the necessary adaptations to Swedish postal regulations that will ensure the ability to maintain good universal postal service in the long term under reasonable economic conditions, despite continued reductions in mail volumes. This is also essential for the achievement of our ambitious environmental goals.”
Mail volumes for the group declined by 3% year-on-year in the quarter, 10% in Denmark and 1% in Sweden, although the figures were affected by the European elections in May.
In the first half of the year, mail volume declined by 5%, or 11% in Denmark and 3% in Sweden.
PostNord is restructuring to make more of its brand. Yesterday the firm called an Extraordinary General Meeting, with its Danish and Swedish government shareholders approving the merger of its Swedish post and logistics businesses — PostNord Logistics AB and Posten Meddelande AB — to form PostNord Sverige AB (PostNord Sweden).
