Posti has announced that its result slipped into the red in the second quarter of the year.
The majority state-owned provider of postal and logistics services reported yesterday that its second-quarter result fell by more than 20 million year-on-year to -3.1 million euros between April and June, largely as a result of sliding mail delivery volumes. It estimated that the volume of addressed letter deliveries declined by seven per cent and that of newspaper deliveries by eight per cent in the first half of the year.
“The first half of the year was a satisfactory one for Posti in a difficult market climate,” CEO Heikki Malinen says in the interim report.
Malinen points out that in comparison to the previous year the adjusted operating result of the state-owned service provider improved from -6.8 million to -0.9 million euros in the second quarter and from 13.7 million to 14.0 million euros in the first half of the year “in spite of lower net sales across all business groups”.
The net sales slid by 5.0 per cent to 385.9 million euros in the second quarter and by 7.8 per cent year-on-year to 776.5 million euros in the first half of the year, according to the interim report.
Posti also reported that when measured in local currency its second-quarter net sales rose by 3.4 per cent in Russia.
Malinen reminds that the service provider has overhauled its mail delivery operations in order to consolidate them flexibly with its other operations and, thereby, to mitigate the rise in unit labour costs created by falling delivery volumes.
He also points out that the de-regulation of the postal market will enable new competitors to enter the market without being hamstrung by public service obligations.
“This puts Posti on a very unequal footing with regard to the competition, as Posti will remain subject to the heavy five-day delivery obligation in spite of the universal service obligation only applying to less than five per cent of Posti's delivery items today,” he says.
“We consider it essential that the universal service obligation is eased in the upcoming renewal of the Postal Act,” adds Malinen.
Aleksi Teivainen – HT
Photo: Antti Aimo-Koivisto – Lehtikuva