Austrian Post sees lower 2020 sales and earnings due to virus (updated)

Oesterreichische Post AG

14/05/2020 07:37

(Adds details)
    May 14 (Reuters) - Austrian Post  POST.VI  expects a decline
in 2020 revenues and core profit as a weak performance in its
letter mail business countered the gains from soaring parcel
volumes in the first quarter, the company said on Thursday.
    The coronavirus pandemic boosted parcel revenues at postal
companies worldwide as consumers confined to their homes turned
to online shopping. But it hit freight volumes and accelerated
the replacement of letter mail by electronic communications.
    Increasing parcel sales cannot offset weakness in the
high-margin mail division due to the high level of fixed costs
in the logistics business, the company said, adding that it saw
a high single-digit decline in its 2020 mail revenues.
    Further costs arise from pandemic-related governmental
regulations, as well as internal safety measures, so 2020
earnings would depend on how the crisis developed in the course
of the year, the company said.
    The majority state-owned group said its objective was to
keep revenue development as stable as possible, compared to a
previously cancelled forecast for full-year revenue to remain
stable or rise slightly compared to the 2019 figure.
    For the parcel and logistics division, sales growth of about
15% should be possible in 2020, the company said.
    Business-to-business deliveries are the bigger driver of
earnings, so any shift towards business-to-customer parcels will
hurt postal companies' margins, analysts have said.
    However, performance of Austrian Post's parcel division is
developing above expectations because private customer parcels
have already been the largest part of its parcel shipments, the
company said.
    

 (Reporting by Zuzanna Szymanska in Gdansk; Editing by Himani
Sarkar and Edmund Blairr)
 ((zuzanna.szymanska@thomsonreuters.com; + 48 58 778 52 86;))