Swiss Post profits slip 5% as staff benefit costs riseOTHER NEW

Swiss Post profits slip 5% as staff benefit costs rise

Friday, March 22nd, 2013

Swiss Post saw higher staff benefits eating into its profits last year, but said in a challenging economy it nevertheless achieved a “good result”.

The national postal operator said yesterday that revenues remained stable on CHF 8.6bn (EUR 7bn) for the 2012 year, but group profit slipped 5% on last year’s result to CHF 859m (EUR 704m).

Swiss Post said the profit drop was “primarily” caused by higher employee benefit expenses, but that productivity improvements had limited the impact.

Growth in parcel and transport revenues also helped alleviate the profit pressure.

Swiss Post’s operating margin fell two tenths of a point to 10.4%, with the company’s investments increased 3% to CHF 443m (EUR 363m) during the year.

The company is now planning to use CHF 100m (EUR 82m) from its profits to contribute towards its pension fund, while a CHF 200m (EUR 163m) dividend will be paid to Swiss Post’s sole shareholder, the Swiss Confederation.

Communications division

Swiss Post’s communication division – including its PostNail, Swiss Post Solutions and post office network – saw its operating profit fall 45% to CHF 61m (EUR 50m) as a result of the staff benefit costs.

Addressed mail volumes continued to fall, by 1.8% in 2012 compared to 2011, but Swiss Post’s unaddressed mail volumes grew 51% as the result of its acquisition of DMC Group.

PostMail, the domestic mail unit, saw its revenues slip 1% to CHF 3.1bn (EUR 2.5bn), with operating profit sinking 30% to CHF 178m (EUR 146m) thanks to the benefits issue, which took a sharp affect in this unit because of its high dependence on labour.

Swiss Post Solutions, the business communications unit, saw its revenues stable on CHF 547m (EUR 448m) for the year, but operating profit fell 72% to CHF 3m (EUR 2.5m) for the year as operations were restructured.

Swiss Post’s post office unit reduced its losses from last year’s CHF 151m (EUR 124m) to CHF 120m (EUR 98m) in 2012, with revenue edging down 1% to CHF 1.69bn (EUR 1.38m). The company said the “significant improvement” came from a cost-cutting drive, which more than made up for declining sales and increased staff costs. Sales of non-postal brand-name items performed well, but the retail division suffered from the continuing declines in letters being mailed and payments made.

Logistics

Swiss Post’s logistics division saw its revenue growing 2% to CHF 1.5bn (EUR 1.23m) thanks to a 4.1% increase in parcel volumes.

Parcel volumes were helped by e-commerce activity and partly from Swiss Post regaining import parcel processing business from Germany.

However, staff benefit costs hit operating profits, which slipped 6% to CHF 152m (EUR 125m).

In Swiss Post’s other divisions, its retail finance unit saw its operating profit up 6% to CHF 627m (EUR 514m), with revenues slipping 3% to CHF 2.4bn (EUR 1.97bn), with a challenging economy hitting interest rates and making investments less profitable. Passenger transport unit PostBus saw its revenue up 8% to CHF 778m (EUR 637m), with a CHF 6m (EUR 4.9m) operating profit that wasn’t comparable to last year because of changes in the unit’s accounting.

Conversion

Swiss Post is converting into a Public Limited Company – remaining wholly owned by the state – from June.

The company said yesterday that in its new form, it will have three subsidiaries – Post CH Ltd, PostFinance Ltd and PostBus Switzerland Ltd. PostFinance is expecting to be issued with a banking licence and will become operationally independent with its own board.

Anticipating the new PLC structure, Swiss Post said it has obtained a credit rating from the agency Standard & Poor’s, with “good ratings” of AA+, while PostFinance has a rating of AA.

The company commented: “As a public limited company, Swiss Post’s goal will be to continue to provide its customers with first-class services in all four markets. The company expects the challenges resulting from the markets and technological change to become tougher. Swiss Post Ltd will face these challenges by continuing to develop its core business to meet the needs of customers, exploiting identified growth options, further optimising its costs and pursuing a market-driven pricing policy.”

Source: Post&Parcel/Swiss Post

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