Decline in letters and parcels affects Swiss Post result
Published: Tuesday, Nov 21st 2023, 12:11
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Swiss Post made a profit of 145 million francs in the first nine months of the current year, which is 142 million francs less than in the previous year. The reason for the decline is the gloomy consumer sentiment and inflation.
Progressive digitization also played a role, Swiss Post announced on Tuesday. By the end of September, it had generated an operating result (EBIT) of 208 million francs (- 137 million francs).
The sale of the subsidiary Swiss Post Solutions also had a significant impact on profits, it added. Operating income as at September 30 amounted to 5.285 billion francs (+ 4.2 percent).
In the logistics business, the operating result amounted to 201 million francs (- 77 million francs), according to the press release. Demand fell in all major product groups: Letters were down 6.6 percent, unaddressed direct mail items 8.5 percent and parcels 5.1 percent.
The decline in letter and parcel volumes also had an impact on PostalNetwork's over-the-counter business. As over-the-counter payments fell by 19.6 percent at the same time, the Postal Network segment's result deteriorated by 16 million francs.
The operating result of the Mobility Services division fell by CHF 8 million. PostBus transported 132 million passengers in the first nine months of the year. This is 15 million more passengers than in the same period last year. Ticket revenue increased, but in return, compensation from the public sector fell. Overall, revenue was not sufficient to cover the higher costs.
Postfinance feels interest rate turnaround
According to its own statements, Postfinance felt the impact of the interest rate turnaround and achieved a lower operating profit. From January to September 2023, the company generated an operating profit of 200 million francs (previous year: 218 million francs).
Rising interest rates on the capital market and interest on balances at the Swiss National Bank (SNB) had not yet compensated for the loss of income from the negative interest rate environment, it said. However, operating income improved to CHF 1437 million in the reporting period (previous year: CHF 1191 million).
The Communication Services segment increased its operating income with strategic acquisitions, primarily in the areas of e-government, secure customer communication and cybersecurity. However, the expansion of the digital offering will take time. As expected, Communication Services therefore continued to post a negative result (minus CHF 57 million).
Compared to the end of 2022, however, customer assets fell by a good 0.6 billion to 104.0 billion francs, according to the statement. At the end of September, the Swiss Post subsidiary had a total of 2.47 million customers compared to 2.46 million last year.
The turnaround in interest rates and the consistent implementation of the "Post of tomorrow" strategy should have a positive impact on Swiss Post's results from 2024, according to the press release.
©Keystone/SDA
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