Swiss Post’s profit declines in the first three quarters of 2016

In the first three quarters of 2016 Swiss Post has generated a Group profit of CHF466m, CHF37m less than in the prior-year period. Operating profit (EBIT) also decreased from CHF640m to CHF593m.

This decrease was mainly due to the lower result from the communication and logistics markets. As stated by the company, the decline in the volume of addressed letters was more pronounced and pressure on parcel margins remains high. At CHF6,039m, operating income increased slightly in comparison to the previous year (CHF6,015m).

In the communication market, Swiss Post recorded an operating profit of CHF94m in the first three quarters of 2016 (previous year: CHF166m). As stated by the company, the decline in profit generated by Post Offices & Sales is principally due to the Group unit’s new internal cost allocation.

EBIT at PostMail fell by CHF11m to CHF235m, while Swiss Post Solutions increased its contribution to the result by CHF5m to CHF15m. The volume of addressed letters fell by almost 4%.

In the logistics market, PostLogistics recorded EBIT of CHF73m (previous year: CHF95m). EBIT fell despite additional income from the 5.6% rise in parcel volumes and increased demand for value logistics solutions. According to the company, this decline is due to modifications to the Group unit’s internal cost allocation.

In the passenger transport market, PostBus increased its EBIT by CHF1m to CHF30m thanks to the low price of fuel.

EBIT at PostFinance declined in the first nine months of 2016, principally as a result of the sharp decline in interest income (-CHF93m year-on-year). Thanks to non-recurring revenue from the sale of equity holdings and a participation, PostFinance nonetheless generated EBIT of CHF410m (previous year: CHF351m). The company stated that, despite this, the negative trend in business operations will continue in the coming years. The reason for this is that it is increasingly difficult for PostFinance to find profitable investments for the customer deposits entrusted to it in the current negative interest rate environment due to the lending prohibition.

If this news article has been of interest you might also like to download Ti’s new Global Express and Small Parcels Report. Ti’s annual report includes insight into what factors are shaping the market as we know it. It also contains Ti’s unique market sizing and forecast data, as well as company profiles of post offices, LSPs and the integrators to showcase their differing strategies as the market develops.

Source: Swiss Post