Swiss Post sees declining profits

With downward pressures on the addressed mail and postal logistics side of the business, Swiss Post has reported a fall in profits compared to 2015. On revenues of 8.2bn francs, its profit was 704 million francs, down 119 million on 2015.

Swiss Post stated, “declining consignment volumes, pressure on margins in the logistics business and the low interest environment in the financial sector” all had a “significant impact” on the 2016 performance.

“Other factors include the sale of a PostFinance participation and a reduction of the depreciation period for tenant fit-outs in logistics centres, which was necessitated by the rapidly changing economic environment in the logistics business,” said Swiss Post.

Addressed letters fell by 3.8%, and while the PostMail division saw an operating profit of 317 million francs, this was down from 358 million francs in 2015. Its operating income was up however, to 2.9 billion francs.

Focusing on the parcels and e-commerce sector, Swiss Post said: “With the boom in online retail, momentum in the logistics market continues to grow. The volume of parcels processed by PostLogistics rose by 5.7% year-on-year (2015: +3.0%). PostLogistics generated an operating profit of 117m francs, down 28m francs year-on-year. This is due to the high pressure on margins in a fully liberalized market and – on the basis of a strategy revision – higher expenses arising from the transfer of product responsibility for private customer parcels from Post Offices & Sales.”

Swiss Post is also taking measures to meet the challenges of increased digitisation. “The replacement of traditional postal products with digital products and services continues,” said Swiss Post. “Inpayments at the Post Offices & Sales unit were down by 5.4 percent. In the past year, the operating result at Post Offices & Sales stood at –193 million francs (previous year: –110 million). At the same time, operating income fell from 1,601 million to 1,196 million francs.

“This was due to both the continuing decline in over-the-counter transactions and adjustments to the internal performance mandate. Since the announcement of the development of the postal network by 2020, Swiss Post has begun taking steps towards establishing a branch network with a broad range of physical and digital access points that are fit for the future.”
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