Austrian Post has announced its Q3 and 9M 2022 results. The first nine months of 2022 for Austrian Post were impacted by challenging conditions. International value chain disruptions have put an upward pressure on costs, which was further intensified by the war in Ukraine and currently makes an economic downturn very likely.
CEO Georg Pölzl commented: “Against this backdrop, the third quarter and the current fiscal year has been very satisfactory. Third-quarter revenue development was positive in all divisions”. Mail Division and Retail & Bank Division have benefited from a positive contribution of special mailings and the acquisition of ING’s retail business, respectively. The parcel business developed well in all regions in the third quarter. In particular, the Austrian market showed a strongly improved third-quarter revenue trend of 8.6 %. Volume growth in Southeast and Eastern Europe led to a 5.5 % revenue increase year-on-year. The Turkish parcel market showed signs of recovery in the third quarter with revenue up by 6.4 % year-on-year, despite having to cope with particularly challenging macroeconomic conditions this year.
Group revenue in the first three quarters of 2022 totalled €1,815.9m (–1.0 %), whereas third-quarter revenue growth was up by 5.7 % year-on-year. The parcel business in Turkey is strongly impacted by inflation and currency effects at present compared with an extraordinarily successful year in 2021. When excluding Parcel Turkey, however, Group revenue increased by 1.9 % in the first three quarters of 2022. The Mail Division reported a revenue decrease of 0.7 % in the first nine months of the year and Parcel & Logistics revenue fell by 4.5 % in total but showed an increase of 1.2 % excluding Parcel Turkey. The Retail & Bank Division developed positively, generating a 62.2 % revenue increase to €85.2m in the first nine months of 2022.
The key earnings figures in the first three quarters of 2022 were also below the prior-year level and were impacted by the current challenging market environment. EBITDA of the first three quarters fell by 3.1 % to €258.0m, whereas earnings before interest and tax (EBIT) declined by 13.0 % year-on-year from €144.0m to €125.3m. The Mail Division generated EBIT of €110.7m compared to €110.8m in the prior-year period.
Strong revenue development supported by special effects from one-off mailings created a positive momentum. The Parcel & Logistics Division reported an EBIT of €58.6m in the first three quarters of 2022, down from €81.3m in the first three quarters of 2021. This decline is mainly attributable to the challenging environment in the Turkish market. The Retail & Bank Division showed an EBIT of minus €24.8m in the first three quarters of 2022, implying an earnings improvement of 26.8 % compared to minus €33.9m in the previous year. The ramp-up of the financial services business following the acquisition of ING’s retail business at the end of 2021 had a positive impact, while higher integration-related and IT expenses produced a negative impact.
Going forward, Austrian Post expects the challenging business environment is expected to continue. The company stated that with inflation being entrenched at a high level, this implies enormous price pressure for energy and personnel while facing, at the same time, an expected economic downturn. Austrian Post aims to address these unfavourable conditions in terms of both revenue and costs. In line with current estimates, the company assumes that short-term visibility is sufficient provided and expects revenue for the full year 2022 to be at the level of €2.5bn generated in 2021. Assuming sufficient energy supply to continue going forward, Austrian Post expects earnings to be at least at the mid-point of the previously indicated range (2021 EBIT: €205m; 2020 EBIT: €161m).
Current macroeconomic issues will become even more challenging in 2023 in the current financial year due to high factor cost increases against the backdrop of economic headwinds. Profitability must continue to ensure high-quality business operations as well as necessary investments in capacity expansion and conversion to sustainable, climate-neutral delivery services. Accordingly, the intended aim of the company is to increase revenue against the backdrop of rising costs and thereby to keep earnings as stable as possible.
Source: Austrian Post