Posten not out of the woods
A boost in operating earnings has not allayed fears over a ‘major negative cashflow situation’ the head of the Swedish postal company has warned.
Eric Olssen, CEO of Posten, said the post would forge ahead with its restructuring, encouraged by the adjusted operating earnings for the first three quarters of 2003 of SKr-147 million, a SKr278 million increase compared to last year. The company said the improvement was primarily attributable to rate adjustments made at year-end 2002.
Cashflow amounted to SKr868 million before financing activities. Negative third quarter cashflow of SKr479 million was ‘seasonal and entirely attributable to vacation liabilities’ said Posten in a statement.
“The major negative cash flow situation clearly shows that Posten’s financial situation is worrisome. The initiative to create conditions for long-term customer satisfaction and profitability therefore is moving ahead undeterred. The effort to shape a new business strategy is in full gear, and a new vision, business idea, goals and strategies as well as an action plan for the future will be formulated by year-end 2003,” stated Olssen.
Net sales for the year so far reached SKr17,954 million, up from SKr17,314 million for the same period last year.
After-tax earnings totalled SKr401 million, down from SKr356 million, including provisions of SKr429 million.
Olssen said the post had been encouraged by the Swedish government’s plans to look into the post’s obligation to provide a cashier service. Posten must provide routine payment transaction services. Olssen said in light of tumbling transaction volumes the government’s contributions ‘have not been sufficient to cover the operation’s extensive losses’. In June, Posten petitioned the Swedish government to assess the situation and to review the case for capping postage rates. A special committee was appointed and the group is set to release its preliminary report in May 2004.
A reorganisation of the post’s executive board and the separation of its messaging and logistics business into two segments were also unveiled.
