- 25 November 2019
- Transport / Logistics Services
Swiss Post saw profits dropped by almost 16% in the first three financial quarters of the year to 263 million francs. The postal operator points to challenging market conditions that has resulted in a fall in interest income at PostFinance of 129 million francs.
The company’s release explained: “In the past, PostFinance and PostMail made the greatest contribution to good results at Swiss Post, but the operating framework has been difficult in both of these areas. Due to improvements in efficiency, PostMail was able to achieve a positive result despite the ongoing decline in letter volumes. PostFinance is also making great efforts, but continued low interest rates are having an impact on the Group result and can no longer be offset by other income or efficiency measures in the longer term. This includes increased parcel volumes. While these volumes are encouraging, Swiss Post is engaged in fierce competition in the parcel delivery market and can only handle the large volume of parcels thanks to high investments in infrastructure.”
Commenting on the results, Alex Glanzmann, CFO of Swiss Post said: “As expected, the third quarter results were lower year-on-year. This reflects developments in a challenging market. However, thanks to intensive efforts in all business areas, results have not declined to the same extent as the deterioration in general conditions.”
Swiss Post is following the debate on the lifting of the lending prohibition initiated by the Federal Council with great interest. Against the backdrop of these significant challenges, Swiss Post is also looking for opportunities to tap into new sources of income. “We want to continue to finance the universal service from our own resources in the future, but this is questionable in the medium term given the difficult operating framework”, said Glanzmann.
Amongst other figures, parcel volumes grew by 7% but in the face of fierce competition for the parcels business this did not reflect so well in profits. Operating profit at PostLogistics fell by 5 million francs to 96 million francs.
Letter volumes fell by 4.5% but profits in PostMail operating profit grew by 4 million francs to 257 million francs. This is thanks to efficiencies driven into the system, reducing operating expenses by 81 million francs.