May 16, 2019 / 8:22 AM / 2 months ago

Austrian Post forecasts stable 2019 earnings as parcels business grows

VIENNA, May 16 (Reuters) - Austrian Post’s operating earnings and revenue will hold steady this year, the company said on Thursday, as speedy growth in its parcel business offsets falling revenue at its much bigger mail and branch division.

The group, whose mail and branch arm delivering direct mail like letters and advertising literature accounts for some 70% of revenues, said earnings before interest and tax (EBIT) grew 1.3% to 57.4 million euros ($64.3 million) in the first quarter.

Revenue edged up 0.4% to 492.5 million euros in the same period.

Austrian Post delivered more letters in the period as insurance and service companies normally send their annual statements at the beginning of the year, but fewer newspapers and less advertising mail, a spokesman said.

While the mail and branch division saw a revenue decline of 1.4 percent, the parcel business grew 6.7 percent thanks to Austrian shoppers’ ever-increasing appetite to buy online.

Although Amazon has established its own delivery services in the Alpine country, Austrian Post forecasts further strong growth in its parcels business, helped by an agreement it struck with Deutsche Post in March.

The group is expanding its parcel logistics and aims to double transport and sorting capacities in the medium term.

Austrian Post said regulatory checks had been initiated with the European Central Bank (ECB) regarding its planned acquisition of an 80% stake in Bruell Kallmus Bank AG, part of Grawe Banking Group.

The company is planning a capital increase to finance the buy and hopes to start offering new financial services in its branches in the course of next year.

It had proved difficult for the mailing group to find a new partner after BAWAG Group decided last year to end its agreement to offer bank services at Austrian Post branches at the end of 2019. ($1 = 0.8924 euros) (Reporting by Kirsti Knolle; Editing by Jan Harvey)

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