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Denmark’s PostNord close to making profit after lean years

The Danish arm of postal service provider PostNord is still not profitable, but came close to breaking even after a stronger start to 2019.

Denmark’s PostNord close to making profit after lean years
Photo: Henning Bagger / Ritzau Scanpix

The company, which is jointly Danish and Swedish-owned, was in the black at the end of 2018 but finds itself back in debt after the first half of 2019, results published on Wednesday showed.

But losses are far smaller than the 750 million kroner seen during the corresponding period in 2018.

PostNord lost 81 million kroner in the first six months of this year.

The company’s Danish arm, PostNord Danmark, is still finding it difficult to turn a profit, but has reduced its losses compared to last year.

Operational losses of 750 million kroner were posted in the first half of 2018, compared to 7 million kroner in the same period this year.

PostNord Denmark has lost a little over 50 million kroner overall so far in 2019, once taxes, interest and other costs are taken into account.

“We are almost where we need to be and are relatively far ahead with our plans,” PostNord Denmark CEO Peter Kjær Jensen said.

“We made money in two of the first six months of the year. That’s the bad part of the year. The good months are from August and September onwards,” he said.

The company was formed in 2009 following partial privatization of the national postal service and a merger with its Swedish counterpart through the 1990s and 2000s. It has since struggled, in part due to the dwindling numbers of letters that are now sent. The second quarter of 2019 saw an eight percent decrease in letter deliveries.

“We are now focusing on online shopping. It is packages and online shopping that will move the business forward,” Jensen said.

The company has been forced to let thousands of employees go while cutting deliveries, raising prices and closing virtually all of Denmark’s post offices over the last decade, replacing them with counters in supermarkets and convenience stores.

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PostNord to continue Danish deliveries until 2023

The Danish arm of Swedish-Danish post distribution company PostNord is to continue delivering the country’s post until at least 2023 after a new deal was agreed with the government.

PostNord to continue Danish deliveries until 2023
PostNord will deliver Denmark's letters until at least 2023. Photo: Mads Claus Rasmussen/Ritzau Scanpix

Post Danmark – the Danish subsidiary of PostNord – extended its contract to deliver post in the country with the government and its allied left wing parties, the transport ministry confirmed in a statement on Monday.

“Distributions of post is an important societal task which every sitting government must take responsibility for,” transport minister Benny Engelbrecht said in the statement.

A “large proportion” of people in Denmark still “do not receive their post digitally and therefore need to receive their post at their home address,” Engelbrecht said.

“It must be possible to receive a letter from your family and to write to your family, regardless of where in the country you live.

“That’s why the deal with Post Danmark has been extended, so Danes can be reassured that post will get through while political work to secure a new, long-term postal agreement continues,” the minister said.

The Danish government owns 40 percent of PostNord, with 60 percent owned by its counterpart in Stockholm.

The company has faced sharp criticism on several occasions since it began announcing losses in 2012. The Danish state has spent to keep the Danish side of the company afloat. Inefficient mail distribution and poor financial management have been among the criticisms.

PostNord was established in 2009 via a merger of the formerly-national Post Danmark and Sweden’s Posten.

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