Bpost profits up 3% as sending of packets grows

Growth in packets and cost-cutting efforts have helped counter a drop in state funding and the ongoing decline in domestic mail volumes at Belgium’s bpost so far this year, reports Post & Parcel. The company issued its half-year results on Wednesday night, stating that revenues have edged up half a percent to €1.235bn in the six months up to the end of June, while pre-tax earnings slipped 2% to €282.4m. Net profit grew 3.1% in the first half to €181.5m. Underlying results, not including one-off impacts like the sale of Certipost, consolidation of Landmark Global and reduction in staff benefits, saw operating income down less than a point to €1.22bn, with underlying pre-tax earnings remaining flat on €267.8m. Underlying net profit was €166.9m, up 3% on last year’s first half. Bpost said a price increase in its mail services helped partially offset the impact of the 4.7% year-on-year decline in mail volumes seen in this first half. The mail volume decline has accelerated compared to last year’s first half, but bpost noted some “recovery” in the half, with the 5.6% decline seen in the first quarter but a 3.8% decline in the second. The company said the “strong” performance of its packets business helped stabilise revenues considering the drop in state subsidy levels under bpost’s new business plan.

Cost-cutting efforts have gone according to plan this year, with staff costs down by EUR 19.5m in the half. “While mail volumes have been under more pressure than last year, we managed to maintain our profitability by controlling our costs in a disciplined manner as in the past,” said CEO Johnny Thijs. “I also welcome the positive developments our revenues in the packets, which are an important part of our strategy for the future.” Looking ahead, bpost said it expected stable revenues and earnings in 2013, despite a continuation of the weakness in the advertising industry affecting domestic mail volumes. E-commerce should continue to bring higher packet volumes, while productivity improvements should continue under various long-term initiatives.