Swiss Post profits slip slightly on mail volume decline

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Swiss Post profits slip slightly in first half on mail volume decline

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Swiss Post said it was continuing a “steady course” in the first half of the year, although profitability slipped slightly compared to last year’s first half.

The company saw its profit fall 1.8% to CHF 370m (EUR 306m) in the first half, with pre-tax earnings (EBIT) down 15% to CHF 472m (EUR 391m).

The firm said the drop in profits was mainly due to write downs on its financial assets.

Otherwise, the company said it achieved a “solid result” in the first six months of 2014. Revenue fell 1.8% compared to last year’s, to CHF 4.2bn (EUR 3.5bn).

The profit fall in the first half follows the company’s 19% profit decline in the whole of 2013, which was in part caused by the impacts of converting into a public limited company, which exposed the state-owned company to new tax liabilities.

Divisions

Swiss Post’s communications market divisions made a slight increase in pre-tax earnings, up 1.3% to CHF 154m (EUR 127m).

Within this market, Swiss Post’s PostMail and Post Offices & Sales divisions were hit by lower mail volumes during the first half, but the decline income was offset by cost savings and by improved business at Swiss Post Solutions, the business services division.

Addressed letter volumes fell by 3.1%, with the number of unaddressed letters falling by 1.3%.

Swiss Post Solutions benefited from acquisitions including the purchase of the UK and Ireland management services business from Pitney Bowes.

Swiss Post said its logistics market business saw its pre-tax earnings slip, by 3% to CHF 66m (EUR 55m), affected by higher transport and delivery costs. Parcel volumes grew by 0.9% year-on-year, but cost-saving efforts could not contain the operational cost increases.

Meanwhile, Swiss Post’s passenger transport business saw pre-tax warnings up 47% to CHF 25m (EUR 20.7m), with the launch of new services.

Banking division PostFinance saw its pre-tax earnings fall by 23% to CHF 230m (EUR 190m) in a “difficult” economy with persistently low interest rates.

Source: Post&Parcel/Swiss Post