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Danish postal service continues to lose money, but closer to breaking even

The Danish arm of the PostNord company is still loss-making but has come closer to profit during 2019.

Danish postal service continues to lose money, but closer to breaking even
File photo: Mads Claus Rasmussen/Ritzau Scanpix

The first nine months of 2019 have returned a loss of 80 million kroner, Ritzau writes.

That represents an improvement on the 307 million kroner loss in the same period last year, according to company results released on Friday.

PostNord’s total operations in Denmark, Norway, Finland and Sweden have resulted in an operational profit of 251 million kroner, compared to a 50 million korner loss for the same period in 2018.

Recent years have seen the company struggle to cope with huge falls in the volume of letters being sent, as digitalization has gradually taken over much of the post’s traditional functions.

PostNord took over Denmark’s post distribution after the partial privatization and selling off of national service Post Danmark.

Today, the company’s primary focus is to deliver parcels, a sector which is in growth due to the advent of online shopping.

Results for the company in Denmark are partly due to a major cost cutting plan implemented last year. Billions of kroner were spent by the company to release thousands of employees.

The company has also cut deliveries, raised prices and closed virtually all of Denmark's post offices over the last decade, replacing them with counters in supermarkets and convenience stores.

The Danish and Swedish states, which are joint owners of PostNord, injected funds to assist the company during the 2018 cost-cutting programme.

An EU commission opened in June this year will investigate whether state support of around two billion kroner from Denmark and Sweden breached EU rules.

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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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