Swiss Post’s result impacted by lower letter and parcel volumes
As expected, 2023 remains a financially challenging year for Swiss Post: up until the end of September 2023, it had generated an operating profit (EBIT) of 208 million francs, which is 137 million francs less than the previous year’s figure. Profit amounts to 145 million francs, 142 million francs below the previous year’s level. The result reflects the challenging market environment and the accelerated trend towards digitization. Swiss Post is confident that the turnaround in interest rates and its consistent implementation of the “Swiss Post of tomorrow” strategy will have a positive impact on the result as early as 2024.
Swiss PostReading Time 5 minutes
Subdued consumer confidence
Subdued consumer confidence, the advancement of digitization and inflation continue to weigh on Swiss Post’s result. At 208 million francs, operating profit at the end of September was 137 million francs below the previous year’s figure. Alex Glanzmann, CFO at Swiss Post, explains: “The result is in line with expectations. It reflects the challenging operating framework.” Profit fell by 142 million to 145 million francs. The sale of the subsidiary Swiss Post Solutions, which had a positive impact on profit in the previous year, remains a key factor here. Operating income as at 30 September 2023 came in at 5,285 billion francs – that is 4.2 percent, or 211 million francs, more than in the same period of the previous year.
6.6 percent fewer letters and 5.1 percent fewer parcels
In the logistics business, Swiss Post generated operating profit of 201 million francs in the first nine months of 2023, down 77 million francs year-on-year. Demand fell in all major product groups: by 6.6 percent for letters, by 8.5 percent for unaddressed promotional mailings and by 5.1 percent for parcels. Declining volumes in letters and parcels had a significant effect on over-the-counter transactions at PostalNetwork. With counter payments also declining by 19.6 percent, PostalNetwork’s result was down by 16 million francs. Mobility Services’ EBIT decreased by 8 million francs. Over the first nine months of the year, PostBus transported 132 million passengers, which is 15 million more than the previous year’s figure. Ticket revenue rose, whereas compensatory payments from the public sector fell. Overall, the income was not sufficient to cover higher costs. Communication Services increased operating income through strategic acquisitions, primarily in the e-government, secure customer communication and cybersecurity sectors. By doing so, Swiss Post is promoting digital transformation in Switzerland with secure and trustworthy solutions. However, expanding digital services takes time. This means Communication Services continues to post a negative result, as expected.
Encouraging outlook at PostFinance
From 1 January to 30 September 2023, PostFinance generated an operating profit of 200 million francs, down 18 million francs year-on-year. By the end of September, rising capital market interest rates and interest paid on deposits held with the Swiss National Bank (SNB) were still unable to offset the loss of income from the negative interest environment. In the current interest rate environment, PostFinance expects an increase in the interest margin and continual improvement in its earnings situation. PostFinance continues to enjoy a high level of customer trust. With the turnaround in interest rates, customer deposits have risen by 500 million francs compared with the previous year. Non-interest-sensitive customer assets, such as funds and e-trading, have increased by 2.1 billion francs since September 2022.