PostNord to cut more jobs as profits drop in “eventful” year

The president of Swedish-Danish postal operator PostNord described 2014 as an “eventful year” as profits dropped significantly. The state-owned parent company of Sweden Post and Post Danmark went through major restructuring programmes in the 12 months up to the end of December, with the aim of boosting long-term profitability in the light of declining mail volumes.

The company is still considering whether to sell off its business services subsidiary, Strålfors, and said this week that 800 more jobs could be lost from the Group as a whole.

In its latest financial figures, PostNord said the windfall from record parcel volumes at Christmas were countered by the continuing digitisation of customer communications and a resulting 5% year-on-year decline in mail volumes.

This included a 4% decline in Sweden’s mail volumes and a dramatic 12% in Denmark’s mail volumes.

Overall, PostNord’s revenue for the year grew just 1% to SEK 39.95bn (EUR 4.2bn), but net income dropped 42% to SEK 176m (EUR 18.4m).

The company’s fourth quarter figures were similar to last year’s, with sales down by a third of a percent to SEK 10.6bn (EUR 1.1bn), but net income slipped from a SEK 31m (EUR 3.2m) gain in the final three months of 2013 to a SEK 80m (EUR 8.34m) loss.

Håkan Ericsson, the president and CEO of PostNord, said: “The year was dominated by major restructuring programs aimed at establishing the right conditions for building a stronger and better integrated PostNord under a common brand. I would like to express my sincere gratitude to all employees for the committed and professional way they have contributed to this endeavor.”

“Progress”

Ericsson said “good progress” was being made in developing more customised, end-to-end services within PostNord.

He said numerous “significant” contracts in the e-commerce field were signed during the last quarter of the year, and that more cost-savings programmes were initiated.

However, the PostNord boss said more restructuring efforts were needed, with the prospect of 800 jobs being lost beyond the 600 cut in the first half of 2014.

“In 2015 further continuous efficiency programs will take place, mainly within production in order to counteract the declining mail volumes,” he said.

The evaluation of a possible sale for the Strålfors business was “proceeding as planned”, Ericsson said, but added that the fulfillment portion of Strålfors will remain within PostNord.