A near SEK1bn loss at PostNord Norway operations led to an overall operating loss of SEK725m (€63m) in the second financial quarter of 2023. Revenues dropped 4% compared to the same period in 2022, to SEK9,812m (€852.4m), led in a large part by falling mail and parcel volumes across the Nordics region.
According to PostNord, an SEK923m operating loss was made from its PostNord Noway operations in the quarter. However, PostNord President and CEO Annmarie Gardshol said that where it came to the adjusted operating profit, -37% down to SEK135m compared to Q2, 2022, the postal operator’s operational problems in Sweden were a big issue. Gardshol said of PostNord Sweden, “Weakness in the economy led to lower Business-to-Business volumes,” that impacted revenue and ultimately adjusted operating profit.
Affecting most of Northern and Western Europe are the macroeconomic factors such as inflation and stalling consumer demand that are both hitting e-commerce. Across PostNord, parcel volumes as a whole dropped 1% compared to Q2, 2022 but mail volumes fell by 14% in the period.
These figures were uneven across the countries in which PostNord operates. Its Denmark operations saw a 24% drop in mail volumes and a 4% drop in parcel volumes, led in a large part by the drop in B2B volumes. The PostNord Norway segment saw a 9% drop in parcel volumes that led in a large part to the SEK923m reported loss in EBIT. Sweden is also seeing large drops in volumes of mail and parcels, though raises in stamp prices for mail have offset mail volume drops in terms of revenue.
PostNord is engaged in a service improvement programme where it is in the process of installing parcel lockers close to residents right across the region. Gardshol added, “Our focus is centred above all on continuing the high-speed rollout of parcel lockers boosting our home delivery services.” There are now 13,000 such parcel lockers and service points run by PostNord across the Nordics region.
Where it comes to sustainability efforts, in the quarter it used renewable energy to fuel 67% of its vehicle fleet – up from 64% in Q1, 2023. PostNord is both investing in LNG powered HGVs for the short term and has come to an agreement with tech company Einride in the quarter to electrify road freight transport. Speaking of long term cuts to greenhouse gases, Gardshol added, “Sweden needs an ambitious long-term plan that creates predictability and that enables the transition to renewable energy. This is important to PostNord, the transportation sector and for everyone in society.”
Looking forward, Denmark’s government has announced the end of the Universal Service Obligation from the 31st December 2023. The legislation has been supported by a number of opposition parties and is in consultation phase but will be put through the Danish parliament in October this year. Under the proposal, the existing USO will be abolished except for islands with low populations off the coasts of Denmark and for Danish residents with visual impairments. For all other addresses in Denmark, there will be a free and open market for mail and parcel deliveries. Gardshol concluded, “We consider that delivering mail and parcels to all parts of Denmark and Sweden is an important service in society, and we are proud to have performed this service for almost 400 years.”