Good half year for Posti

Net sales for Finnish Posti were up by 5.3% for the first half of the year against the same period of last year to €816.1 million. The postal operator’s adjusted EBITDA was up 6.8% to €55.3 million.

Q2 (April – June) net sales were up 3.4% to €402.3 million but EBITDA was down from €21.8m to €19.8m.

Commenting on the results, Posti’s President and CEO Heikki Malinen, said: “The ongoing trend of digitization in the business environment remains strong and reflects directly on Posti, with the Group undergoing a multi-year structural transformation as communication shifts from paper to digital and competition increases in traditional postal operations. The sharp decline in the volume of addressed letters continued, with the rate of decrease being 10% in the second quarter. However, digitization is also a source of opportunities for Posti. Posti continues to build new cornerstones for its business in growing markets according to its strategy: the areas of future growth are in parcel and logistics services, the demand for which was boosted by the favourable economic climate and growth in e-commerce in the second quarter.

“Net sales increased by 3.4% in the second quarter. While letter product volumes continued to fall, the volumes of parcel and logistics products showed favourable development. Adjusted for the number of working days, parcel volume grew by 10% and freight volume by 9% in Finland. Net sales increased by 20.9% in Logistics Services and by 0.5% in Parcel Services. The increase in net sales was also significantly supported by the Group’s expansion through acquisitions as well as the strengthening of Russian rouble. Digitization and the market entry of new players have had a substantial effect on the volumes of basic services, but pricing changes have mitigated the financial impacts of declining mail volumes. We continued our determined and collective effort to ensure high quality. Growth was sought through corporate transactions in areas including in-house logistics, personal assistance services and the delivery of publications.

“Posti’s adjusted EBITDA in the second quarter was 4.9%. The distribution of the net sales and result between the first and second quarter was affected by Easter falling in April this year. The improved profitability of logistics services was supported by a general increase in demand as well as the improved efficiency of operations. OpusCapita’s EBITDA decreased. Posti’s adjusted operating result for the first half of the year improved and represented 1.9% of net sales.

“Itella Russia’s net sales grew by 15.9% measured in euros, but declined by 2.7% in rubles. The measures taken to improve the profitability of Itella Russia’s operations are showing good results already in the half-year period and the adjustment of the cost structure will continue.

“OpusCapita is moving forward with its transformation as planned. The Buyer-Supplier Ecosystem business unit continued its global growth. A transaction to divest the financial management outsourcing business is in the implementation phase. The sending of documents and invoices as well as digitizing operations in Finland will be transferred to Posti’s Postal Services business group within 2017. OpusCapita’s digitizing production in Sweden, Norway and Poland will be outsourced. Following these corporate transactions, OpusCapita will focus on pursuing growth in the Buyer-Supplier Ecosystem business.

“The Postal Act reforms approved by the Finnish Parliament in June are an important decision for Posti. They enable the reform of delivery obligations to correspond to the accelerating digital transformation, thereby improving Posti’s operating conditions in competitive markets and promoting the introduction of new business concepts and technologies. The reforms are also aimed at maintaining the cost-effective provision of universal services throughout the country in the coming years without public subsidies.”
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