Operating profit (EBIT) fell to 207 million francs (previous year: 292 million francs). This reduction is due to the lower contribution to results from three of Swiss Post’s four markets. Volume declines resulting from technological change, as well as the low interest rate environment and value adjustments in the financial sector, pose major challenges for Swiss Post.
In the first three months of 2016, Swiss Post generated Group profit of 192 million francs (previous year: 225 million francs). At 207 million francs, operating profit was 85 million francs down year-on-year. This decline is due to lower contributions to the results from the communication, logistics and particularly the financial services market. Operating income decreased by 2.8 percent to 2,069 million francs (previous year: 2,128 million francs).
In the communication market, Swiss Post recorded an operating profit of 72 million francs (previous year: 83 million francs). The 11 million franc decline year-on-year is principally due to one-off effects at Post Offices & Sales. PostMail and Swiss Post Solutions increased their contribution to operating profit. The decline in the volume of addressed letters was more pronounced year-on-year. The number of addressed letters fell by 3.3 percent. In the logistics market, PostLogistics recorded an operating profit of 24 million francs (previous year: 31 million francs).
Despite additional income from the 3.9 percent rise in parcel volumes, increased demand for value logistics solutions and company takeovers, operating profit dropped due to one-off effects. In the passenger transport market, PostBus increased its operating profit by one million francs to 14 million francs. This positive trend was mainly attributable to the low price of fuel. As the budgets of the public entities which act as contracting bodies for transport services are squeezed, the pressure on prices is rising even more.
Decline in profit at PostFinance
PostFinance, which operates in the financial services market, achieved an operating profit of 102 million francs in the first three months of 2016 (previous year: 172 million francs). The 70 million franc decline is mainly due to higher portfolio value adjustments on financial assets (–27 million francs), whereas portfolio reversals of impairment had been recognized in the prior-year period (+G million francs). Net income from the interest differential business was down 5 million francs due to a lack of profitable investment opportunities. This trend will continue in the current year and heighten the disadvantage of PostFinance not being able to issue its own loans and mortgage. Net trading income dropped by 15 million francs.
The trading volumes seen in the first quarter of 2015, when record sales were achieved in foreign exchange transactions following the lifting of the minimum euro exchange rate, could not be matched in the first quarter of 2016. An encouraging rise was registered in services income, which was up 24 million francs year-on-year. The inflow of new money totalled 1.6 billion francs, with PostFinance’s sight deposit balance at the Swiss National Bank still exceeding the exemption limit.
Source: Swiss Post
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