Swiss Post increases profit in the first half of the year - letter prices rise

In agreement with the price supervisor, Swiss Post will increase the price of A Mail letters by 10 centimes as of January 2022, while B Mail letters will become 5 centimes more expensive, according to a statement made at Swiss Post's media conference on Thursday. For SMEs, on the other hand, there are advantages in parcel shipping, so up to five parcels a day will be picked up free of charge.

The negotiations with the price supervisor also concern other price adjustments, such as for P.O. boxes, redirections in the event of address changes and the international dispatch of letters and parcels. The moderate price increase for letters, which is roughly equivalent to the price of a cup of coffee per household per year, is intended to safeguard the basic service, said Roberto Cirillo, CEO of Swiss Post.

As the price supervisor writes in a statement, it was important to him that the conditions and service for domestic SMEs be significantly improved. In the event of any changes to the universal service mandate, he would review postal rates again. The Foundation for Consumer Protection, on the other hand, criticized the price increase in a press release. Instead of waving it through for letter post, the federal government would be better advised to forego the millions of euros in annual dividends paid out by Swiss Post.

Better result thanks to parcel flood

Thanks not least to online shopping, Swiss Post was able to increase operating income by 7.2 percent year-on-year to 3630 million francs in the first six months. The operating result (Ebit) was 249 million francs (up 188 million francs).

At first glance, these are good figures, said Cirillo. But 2020 was an exceptional year that left its mark. The Corona-related lockdown impacted the result in the first half of 2020, he said. This year, the half-year result is lower than in the years before the pandemic, he said. The better result was mainly due to the increase in parcel volumes.

Huge amounts of parcels delivered

The first experiences of the new "Post of tomorrow" strategy, which has been in place since January, show that Swiss Post has recovered financially, Cirillo said. As of January 1, competencies in letter and parcel logistics have been bundled. This structural change will affect 20,000 employees, but thanks to the efficiency measures, jobs will be secured in the long term.

It was only thanks to investments in logistics that the huge volume of parcels could be handled. "Today, there are around 900,000 parcels a day, and on peak days we crack the million mark, as we used to do in the run-up to Christmas," Cirillo said. Compared to 2020, he said, the number of parcels delivered rose by another 15.8 percent - from January to the end of June, Swiss Post delivered 105 million parcels, compared to around 90 million the previous year.

Logistics to be further expanded

Further investments would also be made in the logistics area in the future: By 2030, Swiss Post plans to invest another 1.2 billion francs or so in the additional expansion of its sorting and delivery infrastructure. The future logistics network is to consist of at least four sites for letter sorting and at least 15 sites for parcel sorting by 2030, which would be at least seven sites more than today. This is expected to create 1,500 additional jobs.

Another key role is played by investments in international goods logistics and links to international logistics networks, as cross-border goods traffic is gaining in importance. Swiss Post therefore acquired logistics companies in the first half of the year.

Slump in payment transactions

Postnetz, meanwhile, improved its operating result by 28 million francs in the first half of the year and posted an operating result of minus 41 million francs. The slump in payment transactions at the branches was minus 11.4 percent, and that at the counter minus 12 percent.

Mobility Services with Postbus, Publibike and Post Company Cars improved its operating result by 34 million francs to 9 million francs. Demand had continued to rise, even if Postbuses were not yet as busy as they were before the Corona crisis.

Postfinance was able to increase its operating result by 19 million to 79 million francs. However, interest income (minus 36 million francs) declined due to the negative interest rate environment.

The digital business Swiss Post Solutions generated an operating result of CHF 19 million. The fledgling Communication Services business generated an operating result of minus CHF 31 million in the first six months of 2021. (SDA)