Sharp drop in mail volumes impacts Posten Norge profits

In the face of mail revenues collapsing by 12.9% at Posten Norge, CEO Tone Wille said, “It has never been more important for Posten Norge to restructure its postal operations. The mail segment is characterised by a dramatic decline in mail volumes and reduced profit. The volume decline is increasing month by month. We must continue to restructure and develop our services. A transition to fewer fixed postal delivery days requires a political decision.”

Overall the Nordic postal operator saw operating profits fall to NOK531 million, a drop of NOK172 million by comparison to 2017. Mail volume falls led this decline in profits, though it has sold a number of subsidiaries in the last year as well.

Posten Norge generated NOK 23 894 million in revenue in 2018.

Commenting on the figures, CEO of Posten Norge Tone Wille, said: “We have had a lot to celebrate in 2018. Our customers have become more satisfied and the logistics market is growing. Previous customers have returned and we have won new ones. At the same time, this is a demanding market with tough competition and low margins. The mail segment is declining sharply as a result of digitalisation.”

In the Posten Norge Mail segment, it saw a revenue drop of NOK186 million to NOK657 million. This is despite the state’s procurement of unprofitable universal service obligations, representing NOK536 million, some NOK 193 million higher than last year and, according to Posten Norge down to the costs of maintaining a five day a week operation across the country.

There was some light in the postal operator’s operations – its Logistics segment grew by NOK787 million. Its adjusted operating profit grew by NOK6 million to NOK135 million. E-commerce seems to have driven this.

“An important success factor in the future is to succeed in e-commerce with industrial production and individual delivery. The logistics network in Norway is the engine of the Norwegian logistics business. When the remaining four terminals are completed in 2020, we will realise the full effect of new production processes and transport management systems, and can exploit the economies of scale,” said Wille.

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