Profits rocket at Poste Italiane

Net profits at Poste Italiane grew by 38% for Q1 of 2018 to €485 million.

Group revenues at the postal operator were up 1.8% to €2.9bn, and EBIT was up 34% to €703 million.

Revenues were down 1.8% to €898 million in the Mail, Parcels & Distribution segment. EBIT however almost doubled to €263 million, and net profit more than doubled to €174 million.

Focusing on this segment’s performance, Poste Italiane said: “While revenues from third parties for Mail, Parcel & Distribution decreased slightly (-1.8%) to €898m compared with the same period in 2017 (€914m), the percentage decline represents an improvement on 1Q17 results (-2.4%) and is driven by the measures taken to improve the quality of traditional postal services and the efficiency of the related operating processes.

“This positive revenue trend as well as a cost discipline led to a significant increase in EBIT to €263m, up nearly 95% y/y.

“The segment is demonstrating an operational improvement in line with 2018 targets.

“The provisions for early retirement incentives are expected to be recorded in the last quarter of the year.

“Parcel revenues reached €175m in 1Q18, up 0.9% y/y, expected to gradually improve over the coming quarters. The sustained growth in parcels volumes saw a 5.4% increase compared to the same period of 2017, for a total number of over 29 million parcels handled in the first quarter of 2018 (1Q17: 28 million).

“Volume trends for the Group are developing in line with the Plan, with mail declining as a result of electronic substitution while the parcel business is profiting from the dynamic growth of the ecom m erce market. However, mail volumes for the first quarter of 2018 show a less steep decline (-3% vs -9.1% in 1Q17) thanks to an increase in recorded mail primarily used for the delivery of international inbound packets used for e-commerce.

“Average Mail prices increased by approximately 3% thanks to a positive volume mix effect, whilst average Parcel prices were down approximately 4%, reflecting the changing volume mix from C2C/B2B to B2C.”

Commenting on the results, Matteo Del Fante, Poste Italiane’s Chief Executive Officer and Managing Director said: “Poste Italiane’s positive first quarter performance demonstrates the immediate impact of Deliver 2022, our five-year strategic plan based on conservative assumptions with very low execution risk. Each business segment has contributed to these results and the real impact is already being seen at both operating and net profit level. In particular, a greater commercial focus is already delivering results across the business, combined with a group-wide cost discipline focus.

“The first quarter saw the achievement of several operational milestones which will help us confirm our position as Italy’s most trusted and effective distribution business. Distribution agreements increase the range of products we can offer through our extensive network to our 34 million customers, while the roll-out of the new Joint Delivery model will allow Poste Italiane to truly capitalize on the fast-growing e-commerce parcel market.”