Austrian Post Faces Challenging First Half of 2022

The first half of 2022 was characterized by very challenging conditions for Austrian Post. Disruptions in international value chains resulted in a cost increase, which was exacerbated by the military actions in Ukraine. Additionally, the figures from the comparison quarters of the previous year, which had exceptionally high parcel volumes, made the start of 2022 difficult.

(Wien) However, the volume development in the Austrian parcel market shows that the trend is improving. While the first quarter was still 9% below the previous year, the decline in the second quarter was only 1%. “Our focus on delivery quality and the many initiatives to attract customers are showing success. This is optimistic for the second half,” says General Director DI Dr. Georg Pölzl.

The group’s revenues in the first half of 2022 amounted to EUR 1,211.8 million (–4.0%), with an improved trend in the second quarter showing a revenue decline of only 0.8%. In particular, the parcel business in Turkey was severely affected after an extraordinarily successful year in 2021 due to inflation and currency effects. Excluding the Turkey business, revenue in the first half of 2022 increased by 0.1%. The Mail & Advertising division recorded a revenue decline of 1.4% in the first six months, while the Parcel & Logistics division saw a decline of 8.9%; excluding the Turkey business, the revenue decline was 0.8%. The Branch & Bank division performed positively with a revenue increase of 49.3% to EUR 54.2 million in the first six months of 2022.

Decline in Profit in the Parcel Sector

The earnings figures also remained below the previous year in the first half of 2022, although an improvement was noted in the second quarter. EBITDA decreased by 2.7% to EUR 179.4 million in the first half, and the earnings before interest and taxes (EBIT) fell from EUR 103.4 million to EUR 91.0 million (–12.0%). The Mail & Advertising division achieved an EBIT of EUR 82.9 million compared to EUR 82.4 million in the previous year. The good revenue development, reinforced by special effects from one-time mailings, led to positive impulses. The Parcel & Logistics division generated an EBIT of EUR 45.5 million in the first half of 2022, down from EUR 59.7 million in the previous year. The decline is mainly due to the challenging environment in the Turkish market. The Branch & Bank division recorded an EBIT of minus EUR 20.4 million in the first half of 2022, compared to minus EUR 27.0 million the previous year, thus showing an improvement of 24.4%. The ramp-up of the financial services business through the acquisition of ING’s retail business at the end of 2021 had a positive effect, while higher costs due to integration and IT expenses had a negative impact.

Challenging Conditions Persist

It is expected that the challenging conditions will continue in the second half of the year. There is also the risk that the energy market will remain difficult to predict, or that gas supply in parts of Europe may not be secure. On the part of Austrian Post, it is essential to address these unfavorable conditions both in terms of revenue and costs. Price adjustments are therefore necessary, as well as efficiency improvements in internal processes. Provided that energy and gas supply in Europe remains secure, the company still aims for a revenue in 2022 that comes close to that of the previous year. The group result (EBIT) for 2022 is expected to be between the levels of the last two years (EBIT 2021: EUR 205 million, EBIT 2020: EUR 161 million). The company’s ambition remains to come as close as possible to the level of 2021. A predictability of gas and energy supply in our markets is a prerequisite for this.

Investment Program in Infrastructure to Be Maintained

The planned investment program for the expansion of logistics infrastructure and a sustainable fleet will essentially be maintained. Individual investments will be reviewed to ensure compliance with all profitability targets. “With the commissioning of the expansion of our parcel logistics center in Upper Austria starting in September 2022, we can significantly increase our sorting capacity at this location. For all of Austria, this means a performance of 131,000 parcels per hour being sorted in our logistics centers,” says Georg Pölzl. “We want to align our capacities for 2030 and also our fleet, which will then enable 100% CO₂-free delivery,” concludes Georg Pölzl.

The full version of the outlook and detailed information (excerpts) from the group management report for the first half of 2022 can be found online at post.at/ir in the reporting download center.

Photo: © Austrian Post