since 25 August 2020, contributing revenue of EUR 160.7m in the first half of 2021. On the other hand, the 70.7 % revenue growth in the Parcel & Logistics Division in the first half-year 2021 was also driven by positive organic volume growth from online orders and positive special effects relating to logistics services. The Retail & Bank Division accounted for 2.7 % of divisional revenue in the first six months of 2021, generating revenue of EUR 34.0m (+18.9 %). bank99 started operating in the market on 1 April 2020. Revenue of the Mail Division totalled EUR 608.2m in the first half of 2021, of which 64.4 % can be attributed to the Letter Mail & Business Solutions area. Direct Mail accounted for 25.9 % of the total divisional revenue, and Media Post had a 9.7 % share. In the first half-year 2021, Letter Mail & Business Solutions revenue amounted to EUR 391.9m, implying an increase of 2.8 % year-on-year. The declining volume trend resulting from the substitution of letters by electronic forms of communication continued. However, the decrease has slowed down to a low level compared to the lockdown-related weak first half of 2020. Volume development is still negatively affected by the current difficult business environment. In contrast, special mailings relating to COVID-19 measures as well as the product and postal rate adjustments made on 1 April 2020 have positively impacted the revenue. International letter mail produced growth, whereas the Business Solutions area reported a slight year-on-year decline. Direct Mail revenue increased by 3.1 % in the first six months of 2021 to EUR 157.6m compared to an 18.0 % drop in the prior-year period. The government- imposed store closings in response to COVID-19 had an extremely negative effect on the advertising business. Currently volatility is high, and the direct mail business will continue to be subject to structural decline. Revenue from Media Post, i.e. the delivery of newspapers and magazines, increased by 3.9 % year-on-year to EUR 58.7m. This increase can also be primarily attributed to the weak first half of 2020. Revenue of the Parcel & Logistics Division improved by 70.7 % in the first half of 2021, increasing to EUR 628.1m. Volume growth slowed down to 20 % in Austria compared to the high growth of 36 % in the comparable period of last year. Amongst other reasons, the excellent revenue development in the parcel business is based on the sustained trend in all markets. Austrian Post has also succeeded in participating in market growth in Austria during this reporting period despite intense competition and price pressure. The uncertainty and restrictions related to the current COVID-19 pandemic continue to provide a boost to the online business. Furthermore, positive effects in the period under review resulted from logistics services. The half-year revenue of the Turkish subsidiary Aras Kargo, recognised as a fully consolidated company in the consolidated financial statements of Austrian Post since 25 August 2020, constituted EUR 160.7m. The development towards the faster delivery of parcels can be observed as a clear trend. In total, 67.6 % of the division's revenue in the first six months of 2021 was generated by the Premium Parcels business (next working day delivery). This corresponds to an increase of about 100 % to EUR 424.8m in the first half-year 2021. The Standard Parcels business area accounted for 24.5 % of the divisional revenue and produced a revenue increase of 25.8 % to EUR 153.6m in the first half of 2021. Other Parcel Services, which encompass various additional logistics services, generated 7.9 % of the divisional revenue totalling EUR 49.7m in the first six months of 2021. This represents an increase of 47.2 %. Regional analysis shows that 61.7 % of the first-half 2021 Parcel & Logistics Division revenue was generated in Austria. The Austrian parcel business produced a year-on-year revenue growth of 28.6 %. 38.3 % of divisional revenue can be attributed to the international business of subsidiaries, of which 25.6 % in Turkey and 12.7 % in South East and Eastern Europe were generated. The revenue increase in the highly competitive region of South East and Eastern Europe equalled 20.1 % in the first half of 2021, driven by higher parcel volumes as a result of the COVID-19 pandemic. Revenue of the Retail & Bank Division improved by 18.9 % in the first half of 2021 to EUR 34.0m compared to EUR 28.6m in the prior-year period. Branch Services revenue fell by 4.4 %, from EUR 22.4m to EUR 21.5m in the current reporting period due to the discontinuation of service fees from the former banking partner, included in the previous period. Revenue from retail goods and branch products remained at the same level. The result from Financial Services of EUR 12.5m in the first half-year 2021 showed a positive development, as can also be seen from the comparative figures for the second quarter. bank99 was launched on the market on 1 April 2020. EARNINGS DEVELOPMENT The largest expense items in relation to Austrian Post's Group revenue are staff costs (46.6 %), raw materials, consumables and services used (28.2 %) and other operating expenses (14.0 %). 6.4 % can be attributed to depreciation, amortisation and impairment losses. There is only limited comparability of the individual items in the consolidated income statement with the figures from the prior-year period due to the full consolidation of the Turkish company Aras Kargo since 25 August 2020. Staff costs in the first half of 2021 totalled EUR 587.6m, implying an increase of 18.8 % or EUR 92.9m. On a like-for-like basis excluding Aras Kargo, staff costs were up by 11.5 % or EUR 56.7m from the previous year. This increase is primarily related to the higher personnel requirements in response to increasing parcel volumes. Operational staff costs also rose year-on-year as a consequence of the full consolidation of the Turkish subsidiary Aras Kargo as well as due to increased staffing needs to deal with the higher parcel volumes. The Austrian Post Group employed an average of 27,489 people (full-time equivalents) in the first six months of 2021 compared to the average of 20,443 employees in the prior-year period (+34.5 %). This increase can be mainly attributed to the full consolidation of Aras Kargo (+6,445 full-time equivalents) as well as the need for more logistics staff as a consequence of increased parcel volumes. In addition to operational staff costs, staff costs of Austrian Post also include various non-operating staff-related expenses such as severance payments and changes in provisions, which are primarily related to the specific employment situation of civil servant employees at Austrian Post. Non-operating staff costs in the first half of 2021 increased due to the need for higher provisions compared to the previous year. Raw materials, consumables and services used climbed by 36.3 % to EUR 355.0m. On a like-for-like basis without Aras Kargo, the increase was 6.9 % year-on-year. This is primarily attributable to an increase in transport expenses in response to the enormous parcel volumes. Other operating income increased by 51.9 % to EUR 43.1m in the first half of 2021. On a like-for-like basis excluding Aras Kargo, other operating income was up by 28.7 % from the prior-year level. Other operating expenses also rose by 23.3 % to EUR 176.8m or 14.3 % year-on-year on a like-for-like basis. The higher costs mainly related to IT services and maintenance. EBITDA equalled EUR 184.5m, up by 64.3 % from the prior-year figure of EUR 112.3m. This implies an EBITDA margin of 14.6 %. The improvement in EBITDA is attributable to the excellent parcel revenue development in all markets. Depreciation, amortisation and impairment losses amounted to EUR 81.1m, up by 26.6 % or EUR 17.0m from the previous year. The increase is mainly due to investments in the new parcel logistics infrastructure and the full consolidation of Aras Kargo since 25 August 2020. Group EBIT increased to EUR 103.4m in the first half of 2021 compared to EUR 48.2m in the previous year. The EBIT margin amounted to 8.2 %. The Group's financial result of EUR 4.7m was EUR 0.5m below the first half of 2020. As a consequence, the profit for the period for the first half year 2021 increase from EUR 39.1m to EUR 84.2m, after deducting the income tax of EUR 23.9m. This implies undiluted earnings per share of EUR 1.18, compared to EUR 0.66 in the prior-year period. EARNINGS BY DIVISON The EBIT of the first half of 2021 increased from EUR 48.2m to EUR 103.4m and was driven by an earnings improvement in the Parcel & Logistics Division. Both the national business with higher parcel volumes and positive special effects and the international parcel business have performed very well. The full consolidation of the Turkish company Aras Kargo since 25 August 2020 positively impacts the Group's earnings. From a divisional perspective, the Mail Division achieved an EBIT of EUR 82.4m in the first six months of 2021. The year-on-year increase of 12.6 % can be attributed to the higher letter mail and direct mail revenue following the prior-year period, which was strongly impacted by the COVID-19 pandemic. In contrast, the product and postal rate adjustments made on 1 April 2020 as well as special mailings had a positive effect in the current reporting period. The Parcel & Logistics Division achieved revenue growth against the backdrop of intense competition and margin pressure, generating an EBIT of EUR 59.7m in the first half of 2021. This corresponds to a year-on-year increase of EUR 41.5m. The earnings improvement driven by the outstanding revenue development was evident in all markets. In particular, the full consolidation of the Turkish subsidiary Aras Kargo as well as special effects relating to logistics services made a positive contribution to the division's earnings. The Retail & Bank Division recorded an EBIT of minus EUR 27.0m in the first half
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August 12, 2021 01:30 ET (05:30 GMT)