Posti half year: parcel volumes up 12%

Posti’s half year results show ‘solid profit improvement’ as well as ‘record high parcel volumes’.

The Finnish postal operator reported that its net sales between January and June were down 1.1% though EBITDA increased to €47.5 million from €42.9 million.

One of the highlights of the statement was that parcel volumes of Finland and the Baltic countries increased by 12%, including a 22% growth in business to customer (B2C) parcels.

Commenting on the performance, Heikki Malinen, President and CEO, said: “In the first half-year of 2018, Posti´s parcel volumes reached another high: volumes totaled 20.9 million, up 12 percent compared to the same period the previous year. In April-June, Posti handled 10.5 million parcels, which was also a new record for the second quarter. Parcel volumes growth is driven by booming e-commerce and consumers are shopping online more than ever. Posti´s B2C parcel volumes showed robust growth of 22 percent.

“As consumer behaviors are changing and digital transformation is moving on ahead quickly, decline in the volume of addressed letters continued. However, it was positive to note that in April-June the rate of volume decrease (-5%) was lower than on the previous year (-10%) due to extra seasonal, such as GDPR-related mail deliveries. As a part of Posti´s new strategy, we seek actively measures to extend mail lifespan by keeping mail vital for both senders and receivers. We feel very encouraged by Posti´s Messaging Services solutions that are combining successfully physical and digital flows. Implementation of digital traceability for mail is ongoing as well.

“In January-June Posti´s adjusted operating result improved to EUR 17.5 million, representing 2.2 percent of net sales. On the whole, we are pleased that profitability of our core business has remained solid through good mail volumes, cost efficiency and growth in Parcel and Logistics. In addition, Itella Russia turned profitable for the first time since 2014. The Group’s adjusted operating result in 2018 is expected to remain on a par with 2017 or to decrease slightly.

“As the competition is continuously tightening and new competitors entering the market, Posti will continue to renew its operations to ensure the company´s competitiveness also in the changing market. This requires investments in areas such as delivery automation, service digitalization and infrastructure maintenance. To meet customer expectations and needs for new services, this coming autumn Posti will launch a same-day parcel delivery service and weekend deliveries in the Helsinki metropolitan area. Posti is continuously adding more parcel lockers and bringing them closer to customers.

“In August, Posti will open one of the largest freight terminals in Finland, the size of three football fields, near the airport in Vantaa. Posti has invested around EUR 33 million to this top-modern terminal. When fully up and running, the terminal will be able to handle 5,700 pallets a day. The terminal improves Posti’s logistics capabilities and creates cost savings.

“One of the four key targets during 2018-2020 is “Renewing our service culture”,”Posti Orange”. With a strong Orange community, we are developing the employee experience and first-rate service for our customers. Recognizing that customer experience is key, all future services will be made to respond to the needs of Posti’s customers. Posti’s services must be future-oriented and digital by default. For example, we have completed the Posti Mobile roll-out with about 9,000 mobile devices for Posti employees.

“Posti is deeply concerned about the government’s plans to tighten postal regulation with a law reform that would force Posti to release all key delivery data to competitors. The law reform would also skew competition and raise serious concerns about the data privacy of customers and all mail receiving citizens. Instead of tightening regulation and increasing delivery related costs, the government should ensure flexible and predictable regulation suitable for the decreasing postal and logistics volumes, and fair and equal rules of competition.

“We continue to renew Posti to make daily life smoother for our customers in the future. I would like to take this opportunity to thank all our customers for their trust in Posti.”