Ongoing costs associated with the universal service obligation (USO) and a new labour agreement has led to operating profits at PostNL fall to minus €9m in the first quarter of 2024, down from plus €7m in Q1, 2023.
Mail in the Netherlands division loss-making
The postal operator division of PostNL made a loss of €5m in the quarter, down from an €8m profit in Q1, 2023. Revenues were down 7.2% y-o-y to €324m.
CEO Herna Verhagen said, “The combination of the ongoing severe decline in mail volumes and a further shift towards non-24 hour mail services, along with high labour costs has led to a negative performance by Mail in the Netherlands”.
Regarding the labour costs, she added, “In the quarter we reached a new agreement… for about 15,000 mail deliverers, offering a new salary structure. Over the period between 1st January 2024 and 31st December 2025, “Wages will increase around 19%.”
Where it came to the costs of the USO, she pointed out that the Dutch government is looking into it even now, explaining, “A modification in postal regulation is needed… to adjust the service level for standard mail to delivery within two days, moving to three days over time.”
Parcels shows signs of recovery
Where the division’s overall profit was down 60% y-o-y to €2m in the quarter, the Parcels division revenue was down just 1.1% to €555m. Volumes were up 4.6% y-o-y to 86m pieces, and across its three segments:
The higher costs of international parcel delivery impacted the bottom line according to Verhagen. “Volumes from international customers have increased significantly, leading to a continuation of the shift to a less favourable mix.” Referring to labour costs again, she added, “As expected, organic cost increases put pressure on our results.”
The unfavourable parcels product mix is being addressed by PostNL’s leadership. Verhagen concluded, “We are gaining momentum in our strategic actions to better balance volume and value, and these will start contributing to our results in the course of 2024.”
Author: Richard Shrubb
