The Russian Post’s profits for the year increased by 14%. The company’s net profit in 2019 exceeded RUB 3 billion, and investment in development exceeded RUB 20 billion. This year the company is preparing to invest three times as much in modernization.
Total Revenue amounted to 206.86 billion rubles, which is 9% higher than in the year before last. EBITDA increased by 27% and added up to 19.36 billion rubles. The Russian Post’s main source of income last year were parcels and EMS delivery, followed by financial services and transaction services. In 2020, the Russian Post investment program should amount to almost 60 billion rubles. One of the most costly areas is logistics and transport (almost 20 billion rubles). The rest of the corporate investments include digital transformation and improvement of information technology.
This year, to finance the investment program, Russian Post plans to issue perpetual bonds for 70 billion rubles. Their most recent bond in 2019 pays 7.55% coupon and has a rating of AAA (according to ACRA). Considering the positive 2019 annual report, ruble bearing relatively stable during the pandemic and a global rise of home deliveries the risk of default is minimal. Taking into account the 7.55% coupon on previous debt, the thought of purchasing the forthcoming Russian Post bonds can be a good addition to fixed income portfolio.