Economic slowdown causes dip in earnings
Posten interim report January-March 2009
- The merger between Posten and Post Danmark was approved by the EU Commission on April 21
- Net sales totaled SEK 7,601m (7,738)
- Operating earnings totaled SEK 394m (694)
- Action programs in progress impacted earnings by SEK 230m
- Continued strong financial position, equity-assets ratio of 45%
President and CEO, Lars G Nordström, comments:
Posten's earnings were down two percent in the first quarter, to SEK 7,601m. Operating earnings totalled SEK 394m, SEK 300m less than the corresponding quarter last year. This is not unexpected considering the prevailing economic climate. The sharp economic deceleration has led to reduced demand for Posten's distribution solutions, primarily in the logistics and messaging operations. Stralfors has also been impacted by a drop in suborders under existing contracts, including a significant fall off in demand for labeling solutions for auto industry customers.
The messaging market continues to be characterized by increasing competition from other market players. The logistics market currently has overcapacity in relation to demand, resulting in strong pressure on prices. Existing distribution capacity is rolling along, though with lower fill ratios. Posten's infrastructure entails a high share of fixed costs. This becomes particularly noticeable when volumes decrease. It is therefore an asset that Posten has been able to face the prevailing sharp economic downturn from a strong financial position. We also see that our action program, estimated to have an overall positive impact on earnings of approximately SEK 1 billion this year, is proceeding according to plan. As a result, we will be able to act swiftly and flexibly to address the drop in volumes with actions in all areas of the operation. It is anticipated that the action program will have an impact on earnings of SEK 230m during the first quarter. We will now work to ensure that the remaining impact on earnings is achieved.
On April 21, we received the welcome news that the EU commission has approved the merger between Posten and Post Danmark. This means that we are now working towards merging Posten and Post Danmark into a combined group. The two companies offer high-quality, easily accessible postal services to Swedish and Danish citizens. In our continued work, we will seize the strengths of each operation and transform them into attractive offers for our customers. We are well-prepared from both sides to establish an organization that can quickly bring home the strategic advantages of this historic merger and create the most competitive Nordic alternative for all customers in need of communication and logistics solutions to, from and within the Nordic region.
The interim report can be downloaded from the link below.
Please direct any questions to:
Posten Media Relations, phone: +46 (0)8 23 10 10, e-mail: firstname.lastname@example.org
Posten connects people and organizations around the world by delivering mail promptly, reliably and cost-effectively. We drive value creation by combining conventional postal services and convenient electronic solutions, and integrating these services into customer businesses. With over 4,000 retail service outlets, we provide daily service to 4.5 million homes and 900,000 businesses in Sweden. Every day we handle close to 20 million pieces of mail. With sales over SEK 30 billion and roughly 30,000 employees, the group is one of the largest in Sweden. The group's parent, Posten AB (publ), is wholly owned by the Swedish Government. For more information, please visit our website at www.posten.se