Challenging market reinforces need for additional changes at PostNord

PostNord has announced net sales of SEK 9,711m in the first half of 2011, a 2% decline, excluding currency changes, compared to SEK 10,231m in the first half of 2010.

The company’s operating profit totalled SEK 211m, down 12% from the same period of 2010, excluding structural and currency changes. Profit before tax totalled SEK 246m, down from SEK 254m for the comparable period of the previous year.

CEO, Lars Idermark said: "PostNord’s development during the second quarter of 2011 is generally in line with the previous quarter. However, quarterly results were characterised by the challenging situation with a dramatic drop in volumes in Denmark and a more stable trend in Sweden.

"All in all, the group’s logistics business continued to develop according to plan. Agreements were signed during the second quarter for the acquisitions of Eek Transport in Norway and Nils Hansson Logistics in Sweden, in line with our strategy to make acquisitions to broaden and further strengthen our logistics offer to our customers.

"Business area Meddelande Sverige improved its operating profit, despite reduced revenues from traditional mail operations, while development for Information Logistics was weaker than expected. A significant drop in sales for business area Breve Danmark was unable to be countered with corresponding cost reductions. The group therefore reports a decline in year-on-year operating profit for the second quarter. The operating margin was 2.2%.

"Following a strong year start, the Swedish economy weakened slightly, although the full-year economic development is expected to be among the strongest in Europe. The Danish economy is weak and is expected to remain so for the remainder of 2011. Global economic uncertainty increased significantly during the second quarter and the beginning of the third quarter. The financial markets are deeply concerned about plunging stock markets. Demand for our services is strongly linked to macroeconomic development. Increased economic instability therefore involves an increased level of uncertainty in demand regarding PostNord’s markets within communication and logistics.

"Our Danish mail operation is characterised by an accelerated drop in mail volumes and reduced volumes for unaddressed direct mail (UDM). The volume trend reflects both the weak Danish economy and the strong competition from digital alternatives and other postal operators that currently prevails in the market, and which is exacerbated in turn by the economic situation. Our Swedish mail operation is also experiencing a drop in mail volumes, chiefly due to competition from rising levels of digitalisation.

"With an unstable global economy and structural market changes that, essentially, impact demand for our services, we need to make comprehensive changes to further reduce costs. We are now implementing a special cost savings programme to reduce the group’s administrative costs by approximately SEK 1 bn from 2013. We are also making adjustments to the group’s management structure in order to increase manoeuvrability and focus on profitability," concluded Idermark.

Quelle: eyefortransport

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