Correos obtained a net profit of 14.8 million euros last year. A positive fact for the public postal company, especially when coming from a 2018 in which it lost 153 million and after accumulating red numbers in recent years. In fact, this is the first time that it has registered profits since it did so in 2014. “The main engine of growth is the parcel,” the president of the Post Office, Juan Manuel Serrano, assured this Wednesday in the presentation of the results, acknowledging that the postal business is in decline.
Despite the notable boost of parcel delivery – thanks to the boom in trade on-line-, the postal business remains the core of the Post Office. And this presents a fragile future. “The postcard represents the bulk of the company, from which derive some 1,400 million of turnover. That is why we are concerned that it is falling sharply, to double digits (-12.4%), ”Serrano said.
The collapse of the postal business affects the future of the firm, which is forced to explore new services and products to counter this collapse. So far, it has been able to alleviate it with the parcel: in 2019, it managed the shipment of 129.32 million packages through Correos, 22% more, and 67.24 million with Correos Express, 14% more.
In this way, the postal company has managed to close the last year with an increase in income of 11%. And the gross operating profit (ebitda) reached 50 million euros, almost double that of the previous year (92%). The drastic change in the company's accounts is also due, in part, to an accounting effect, since in 2018 there was considerable extraordinary expense in having to repay 167 million euros to the Public Treasury. This payment was made because Brussels considered this amount received between 2004 and 2010 as excessive State aid.
With these good results, the state company reaffirms its intention to increase the diversification of the business, since they consider it as the key to get out of the red. “These figures are a turning point and reflect the success of the expansion and diversification strategy,” Serrano insisted. Among the new businesses he is targeting, the president highlighted logistics. “We have the necessary assets to offer storage to our clients. I think it is the next step we must take to make Correos a logistics benchmark in Europe. “
Serrano also pointed out that other possible business channels remain open. Hence the negotiations to obtain agreements that allow them to offer products from other companies in their offices. As an example, the one already reached for the sale of Renfe tickets or, even, possible agreements with financial entities. “We hope to reach some kind of agreement in the financial field this year to work from our offices,” acknowledged the president.
On the significant increase in the turnover, Serrano played down the effect of the elections that took place last year, as well as the amount he receives from the State for taking care of the provision of the postal service (SPU): “Voting by mail meant 6% of total revenue, but also incurred expenses. The net result of the elections is minimal, ”he said.
In addition, it has added the importance that the improvement of internal processes and more efficient management will have in the coming years. “We have to rationalize our distribution model. It is being discussed internally, also with the unions, to take advantage of any business opportunities that may exist,” he said. For this improvement, Serrano has not ruled out the possibility of staff movements within the territory: “We see business margin and improved profitability, but it depends on there being an agreement with the unions,” he said.