Posten Norge (Norway Post) has made a financially healthy start to 2020 as strong growth in B2C parcels outweighed lower mail and B2B volumes during the first quarter amid disruptions caused by coronavirus lockdown restrictions.
Parcel volumes for home delivery continued to rise in April to about 20 – 25% more than previous year levels, according to its recent status updates.
The Nordic postal group today reported higher revenues and profits for the January – March quarter, which was dominated by the impact of the Covid-19 pandemic on demand and operations. Revenue rose by 0.9% to NOK 5,964 million while adjusted operating profit improved to NOK 153 million, up by NOK 46 million on the same period in 2019.
"We delivered good financial results in the first quarter,” said CEO Tone Wille. “In the latter part of the quarter the corona pandemic led to a decline in activity in the corporate market, while demand increased in the consumer market, resulting in strong growth in the volume of parcels from e-commerce. We have largely succeeded in adapting our operations to these volume fluctuations, at the same time as we have focused on HSE and introduced infection control measures.”
Increased parcel volume and more home delivery
While international trade and parts of the business community almost stopped as a result of tight restrictions to limit the spread of Covid-19, households increasingly turned to online shopping. This has led to large volume fluctuations in the group's operations. During the corona pandemic, Posten Norge and international division Bring experienced a 400% increase in home delivery of parcels compared with the corresponding weeks last year.
The group’s Logistics segment increased quarterly revenues by 2% to NOK 4,471 million while adjusted operating profits surged to NOK 99 million from just NOK 8 million one year ago due to cost savings and better productivity. E-commerce volume in the last 12 months increased by 15%, with increasing growth toward the end of the quarter driven by home deliveries.
In contrast, the volume decline in addressed letters (-11%) and unaddressed mail (-27.5%) continued, resulting in a 15% slump to quarterly revenue of NOK 1,631 million. Mail profits dropped to NOK 94 million. The corona pandemic had a negative impact on volumes in the latter part of the quarter, and the company is set to switch to delivering mail every other day from July onwards.
New services and network expansion
Posten Norge stressed it had responded quickly and flexibly to the Covid-19 lockdown restrictions in Norway and in Sweden. Posten Norge and Bring launched innovative new services, introduced contact-free deliveries and confirmation of receipt, delivered PPE items to the Red Cross in Sweden and donated shipping services for a 3D printing initiative in Norway.
To strengthen the service offering and get closer to customers, Bring in Sweden has established 1,700 collection points across the country, giving the group full Nordic coverage. In addition, a new terminal was opened in Uddevalla on 1 April to further strengthen Bring's capacity and network in Sweden.
In Norway, Coop and Posten Norge have begun working together on home delivery of groceries. The solution launched in March is the first of its kind to allow home delivery of groceries across the country.
"Posten Norge has maintained almost normal operations throughout the period and the group's key role as a deliverer of mail, parcels and goods has been underscored,” Wille emphasised.
“There has been a change in many user habits and we see that several of our new services help make everyday life easier for most people. There is reason to believe that parcel volumes from e-commerce and home delivery will stabilise at a higher level than before the corona pandemic," she predicted.
