PostNord – Inflation and end of Danish USO affect full year income


The Danish government’s ending of the universal service obligation (USO) with PostNord and inflation hampered its profitability over 2023. The Nordic post and parcel operator made an operating loss of SEK 564m (€49.6m) in 2023, a fall from operating income of SEK 357m (€31.4m) in 2022. Revenues fell by 4% y-o-y to SEK 39.3bn (€3.46bn).

Universal service obligation reform in Denmark and Sweden

In 2023, Denmark’s government passed a new law that effectively ended PostNord’s 400 year old relationship with it as the universal service obligation has been abolished. Commencing from January this year, only the visually impaired and residents of small outlying Danish islands must receive a postal service, and for the interim PostNord will be making these deliveries. In the meantime, the postal operator will still deliver mail but without the constrictions of the USO. The move contributed to PostNord’s losses made over the year.

Noting a Sweden government report in 2023 established that the postal operator is incurring costs due to its USO there, Gardshol said, “We want decisions on regulatory relief in the firm of revised quality requirements… as early as possible. This would defer the time at which the main business can no longer be operated without State aid.”

Inflation and other cost pressures

Alongside the loss of its USO in Denmark and the ongoing pressures of the Sweden USO, inflation hit the Nordic parcel postal operator, both in terms of lost income and from falls in parcel volumes. Overall parcel volumes declined by 5%, with B2C parcel volumes dropping 1% y-o-y and B2B parcel volumes dropping by 10%.

Referring to the fourth financial quarter that saw a 720% y-o-y growth in income to SEK 124m (€10.9m), PostNord CEO Anne Marie Gardshol said, “Several of our segments – and the group as a whole – report improved income. This is the first time since the pandemic… that the Group’s operating income has increased.” Gardshol put this down to “Ongoing and decisive actions to address lower parcel and mail volumes and high costs from inflation.”

Thanks to the various headwinds that until Q4 made for low profitability at PostNord, the company’s leadership is working to address pricing. Gardshol concluded, “We are continuing to adjust pricing and capacity to maintain the pace of our improvement programs.”

The Annual Report for PostNord is set to be published on 8 March, and this will show the major detail behind the cost saving and pricing initiatives the CEO referred to.

Author: Richard Shrubb