Quality issues and reorganisation delays affect PostNL’s Q2
In its financial report on the second quarter of 2012, PostNL has reported that mail in the Netherlands has been impacted by additional costs and a delay in the reorganisation of letter mail.
CEO Herna Verhagen stated: “The second quarter continued the weaker than anticipated start to the year. Parcels showed good volume and revenue growth in all business lines and a strong operational performance. Trans-o-flex contributed positively to revenue and results. Also, International contributed to overall underlying cash operating income. The mail quality issues that became apparent in March resulted in additional costs and in the delay of the letter mail reorganisation, both of which clearly impacted Q2 performance.
“In April the decision was taken to stop the roll out temporarily because of larger than expected problems resulting in quality issues. During my first full quarter as CEO of PostNL, my priorities were to improve quality in order to retain customers. We established measures and solutions, which we are currently piloting, to facilitate a controlled roll out of the letter mail reorganisation. After a careful review of the results, we will take a decision with respect to the further roll out of the reorganisation at the latest in Q4. We remain confident we will reach our longer-term savings targets.”
Summary outlook 2012
On the basis of its Q2 results, PostNL expects total revenues to be in line with 2011 as mail in the Netherlands is expected to show a mid single-digit decline, rather than the previously indicated low single-digit decline, and the parcel sector is expected to exceed the high single-digit revenue outlook due to the acquisition of Trans-o-flex.
The company has reaffirmed its outlook for underlying cash operating income of EUR110 million - EUR160 million, with the expectation of it being in the bottom half of the range because of the delay in the reorganisation.
Q2 Highlights
• Underlying revenues down 0.2 percent to EUR1,022 million
• Underlying cash operating income EUR10 million
• Net debt increased by EUR129 million versus end 2011 to EUR1,131 million
• Parcels and International Interim dividend 2012: EUR0.181 per share to be paid fully in shares
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