Sharp drop in PostNL profits

PostNL has seen profits fall markedly in Q1 from €41 million in Q1 of 2017 to €14 million this quarter.

Revenues however climbed €5 million to €875 million. Revenue contribution to this from e-commerce increased to 42% of this, as compared to 34% in Q1 of 2017.

Addressed mail volumes fell by 1.3% though parcel volumes somewhat offset this with a climb in volumes of 25%.

In a statement, PostNL CEO Herna Verhagen said: “As anticipated, our Q1 performance was below the comparable quarter last year. However, we continue to make good progress in our transformation to be the postal & logistic solutions provider in the Benelux. 42% of our revenue is now related to e-commerce, showing that we are on track towards our 2020 ambition of more than 50%.

“Volume decline in Mail in the Netherlands continued in line with our expectations. Substitution remains the driver, but, again, we see intensifying competition from postal operators, supported by the earlier ACM measures. We achieved €8 million of cost savings and continue to make progress in the preparation and implementation of our cost savings projects.

“We are actively participating in the postal dialogue, initiated by Dutch government. Further discussions are scheduled to take place shortly. We repeat that to facilitate an orderly and rational adjustment of the Dutch postal market to declining volumes, regulation must be amended as soon as possible and consolidation of postal market players is inevitable.

“In Parcels, strong volume growth reflects our solid position in the Benelux e commerce logistics market. Revenue improved, also helped by last year’s acquisitions in logistics services. The strong volume growth drives the planned investments in growth, impacting results. The construction of three new sorting centres started. We expect these to contribute to efficiency improvements towards the end of the year.

“In International, the performance was unsatisfactory. Competition remained fierce, especially in Germany and Italy.

“We confirm our outlook for 2018. Our aim to pay progressive dividend remains unchanged. The AGM approved the dividend of €0.23 per share for 2017, the final dividend of €0.17 per share will be payable on 9 May.”