Bpost performs better than expected – Companies

Bpost exceeded its own expectations in the second quarter. CEO Dirk Tirez remains cautious: ‘Strong headwinds from inflation, wage indexation, transport and energy costs and consumer confidence continue to cause uncertainty.’

In the second quarter, bpost had a turnover of 1.04 billion euros, stable compared to the same period last year. Adjusted operating profit (EBIT) was more than a fifth (22.5 percent) lower at 82.6 million euros. The results are better than what the analysts had expected.

Bpost also recorded better figures than it had expected. The second quarter exceeded the EBIT guidance of 280 to 310 million euros for the full year, it said. “We are able to de-risk from our original outlook from up to €40 million to €25 million,” Tirez said.

In particular, the good performance of the logistics subsidiary Radial in North America kept bpost afloat. It gathered more customers and was able to increase revenue by almost a fifth.

At the Belgian operations, which account for half of the turnover, bpost suffered a blow in the parcel activities: it delivered 12.9 percent fewer parcels than in the quarter plunged by the corona pandemic a year earlier. The fall is mainly due to the fact that the American online store giant Amazon is taking the delivery of packages into its own hands.

According to Tirez, bpost is able to recover the lower parcel volume for Amazon from other customers. In the second quarter, according to the CEO, 40 percent of the lost volume was involved. In addition, these are often new commercial customers, which give bpost better margins.

The volume of mail also fell by 7.5 percent. Higher prices for stamps could limit the loss of income from 20.3 to 7.3 million euros.

In addition, higher costs for energy, transport and wages, as a result of automatic indexation, weighed on profits. ‘At bpost, the labor costs are 70 to 73 percent of the total costs,’ emphasizes Tirez.

Staff reductions and an unexpected tax softened the accrued bills. In one year, 780 full-time employees were made redundant. In addition, bpost continues to reorganize, without replacing departing employees or offering people new positions internally. “We continue to adapt our organization to our customers’ requirements,” says Tirez. ‘We have to be there when the customers want us to be there, for example for evening and weekend deliveries.’

In the coming quarters, the CEO remains wary of difficult market conditions with continued high inflation, further wage indexation, high transport and energy costs and declining consumer confidence. “The focus remains high on being as prepared as possible for the uncertainties that await us. We are taking proactive steps,” says Tirez. Bpost will continue to acquire new customers, ‘raise prices where possible’ and reduce costs.

In the second quarter, bpost had a turnover of 1.04 billion euros, stable compared to the same period last year. Adjusted operating profit (EBIT) was more than a fifth (22.5 percent) lower at 82.6 million euros. The results are better than what the analysts had expected. Bpost also recorded better figures than it had expected. The second quarter exceeded the EBIT guidance of 280 to 310 million euros for the full year, it said. “We are able to de-risk from our original outlook from up to €40 million to €25 million,” Tirez said. In particular, the good performance of the logistics subsidiary Radial in North America kept bpost afloat. This brought together more customers and was able to increase revenue by almost a fifth. At the Belgian activities, which account for half of the turnover, bpost suffered a blow in the parcel activities: it delivered 12.9 percent fewer parcels than in the corona pandemic quarter a year earlier. The fall is mainly due to the fact that the American online store giant Amazon is taking the delivery of packages into its own hands. According to Tirez, bpost is able to recover the lower parcel volume for Amazon from other customers. In the second quarter, according to the CEO, 40 percent of the lost volume was involved. In addition, it is often about new commercial customers who give bpost better margins, it says. Mail volume also fell by 7.5 percent. Higher prices for stamps could limit the loss of income from 20.3 to 7.3 million euros. In addition, higher costs for energy, transport and wages, as a result of automatic indexation, weighed on profits. ‘At bpost, the labor costs are 70 to 73 percent of the total costs,’ emphasizes Tirez. Staff reductions and an unexpected tax softened the accrued bills. In one year, 780 full-time employees were made redundant. In addition, bpost continues to reorganize, without replacing departing employees or offering people new positions internally. “We continue to adapt our organization to our customers’ requirements,” says Tirez. “We need to be there when customers want us to be there, for example for evening and weekend deliveries.” For the coming quarters, the CEO remains aware of difficult market conditions, with continued high inflation, further wage indexation, high transport and energy costs and declining consumer confidence. “The focus remains high on being as prepared as possible for the uncertainties that await us. We are taking proactive action,” says Tirez. Bpost will continue to acquire new customers, ‘raise prices where possible’ and reduce costs.

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