Austrian Post was in the news earlier this month after rumours emerged that it could fail to find agreement on strategy with one of its key partners, Aras Kargo.
The Turkish parcel delivery group wants to buy back the stake in Aras Kargo owned by Austrian Post, while the latter wants to grow its shareholding.
Chief Executive Evrim Aras reportedly said Austrian Post was not the right partner to achieve the goal of becoming a global brand – for its part, Austrian Post’s spokesperson was quoted as saying that should no agreement be reached, a longstanding legal dispute may ensue.
This is compounded by Austrian Post’s most-recent financial statement.
First-quarter revenues declined 1.2% to €592.8m, with mail revenue falling due to lower volumes and its main financial metrics remaining in negative territory.
The company saw stable development in the parcel segment where the “trend towards increased e-commerce is continuing”, characterised by “a perceptible intensification of competition”. Meanwhile, customer service was enhanced to include Saturday and evening deliveries.
The mail business continued to be impacted by the “ongoing substitution of traditional letter mail by electronic forms of communication”, it noted in its quarterly release, adding that “public sector customers as well as banks and insurance companies are trying to reduce mail volumes”.
Its quarterly EBIT dropped 5.3% to €51.1m, but the plunge in EBITDA was more pronounced, down 7.6% to €69.4m year-on-year. Pre-tax earnings and earnings per share fell by 11.4% and 11.6%, respectively. Austrian Post noted, “Earnings were negatively impacted by interest rate effects for staff-related provisions”.
“Against the backdrop of internationally low interest rates, the discount interest rate was adjusted for various staff-related provisions, which in turn led to a negative earnings effect of €9.5m compared to €4.8m in the first quarter of 2015.
Staff costs amounted to €286.4m in the first quarter, up 1.7% year-on-year, while operating cash flow was essentially flat year-on-year.
The Mail & Branch Network unit generated quarterly EBITDA of €79.7m, down 5.7%, while EBITDA from the Parcel & Logistics division came in at €10.5m, compared to €12.3m one year earlier.
Total revenue for the year is projected to hit €2bn, while it targets a stable operating income.
Source: Transport Intelligence, July 20, 2016
Author: Alessandro Pasetti
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)