Royal Mail has revealed a £20m group operating loss in the first half of 2020, while insisting that a rise in parcel deliveries during the pandemic will improve its outlook.
The loss compares with earnings of £61m at the same point last year and follow an underlying operating loss of £129m at its core Royal Mail postal arm.
Group pre-tax profits fell by 90.2% to £17m during the same period.
But Royal Mail said it expected full-year revenues to be between £380m to £580m higher year-on-year, which could see a “better than break-even” result.
Keith Williams, interim executive chair at Royal Mail, said: “The growth in online shopping and parcels during the pandemic, combined with our increased focus on delivering more of what customers want, has led to revenue growth of nearly 10% for the group in the first half, with Royal Mail revenue up nearly 5%.
“For the first time, parcels revenue at Royal Mail is now larger than letters revenue, representing 60% of total revenue, compared with 47% in the prior period.
“As parcel volumes at both Royal Mail and GLS have continued to be robust year to date, revenue performance in the scenario has improved.
“It remains difficult to give precise guidance but parcel growth is expected to remain robust in the third quarter, with more uncertainty over trends in the fourth quarter due to the development of the COVID-19 pandemic, further recessionary impacts and trends in international volumes.”