Few Ukrainian companies can say they remained profitable last year, but Nova Post, the private courier and logistics company part of the Nova Post Group, not only saw profits but also opened 1,000 new branches and expanded rapidly into the European Union.

It is proving to be one of the most resilient and vital companies in the war-torn country, continuously working since day one of the full-scale invasion to help businesses and deliver aid to citizens close to the front line.

“We arrive in the de-occupied territories just after Ukrainian troops,” explained co-owner of the Nova Post Group Vyacheslav Klymov in an exclusive interview with bne IntelliNews.

In Kherson, Nova Post drivers arrived the day after the city was liberated on November 11, equipped with flak jackets, helmets and urgent supplies for the residents who had suffered nearly nine months of Russian occupation. In Kharkiv, businesses are beginning to reopen, strategically positioned close to Nova Post offices where they are able to collect deliveries just 24 hours after ordering.

 

Nova Post employees distribute aid in Kherson shortly after the liberation (photo)

Nevertheless, in the face of unparalleled challenges, the company suffered a turbulent start to the war, with just 2% of turnover in the first two months of the invasion compared to the pre-war year. Nova Post lost around 1,000 points of service to Russian occupation, whilst missiles destroyed seven sorting centres. At the same time, 3,000 employees, around 10% of the total staff, joined the Armed Forces and the number of customers dwindled.

Physical damage to Nova Post facilities is currently estimated at $25mn and the destruction of roads and other infrastructure slowed down delivery times to four-five days. Faced with the grim realities of war, Klymov was concerned that the company would have to shut down and subsequently suspended operation at 80% of its network. But the determination to continue carried the company through and the network has completely reopened in Ukrainian-controlled territories.

“Nova Post is a vital infrastructure for Ukrainian businesses and private customers,” Klymov states.

 

Damaged terminal in Kharkiv (photo)

In total, Nova Post delivered 315mn parcels and cargoes last year, a 15% decline compared to 2021. Nevertheless, the company surpassed 2021 figures in the first six months of 2023 with 170mn parcels delivered overall and 1.5mn parcels delivered daily. Delivery times are now even faster than in the pre-war period, with a 24-hour average, even on journeys from the far east of Ukraine to the far west.

Currently, Nova Post has 24,000 points of service in Ukraine – 10,000 post offices and 14,000 parcel lockers. But the company has been forced to look towards Central and West Ukraine for its new offices and sorting centres, coinciding with the migration of businesses away from South and East Ukraine.

Nonetheless, Nova Post has not turned its back on the occupied territories and is ready to reopen straight after the army liberates the regions. Klmyov predicts the company will be key to the success of the reconstruction process by helping businesses reopen and attract back residents.

“I know that one of the main roads of reconstruction and rebuilding in Ukraine will be the role of Nova Post,” he says. “Because Nova Post works, companies can open their facilities now and go back to Kharkiv, for example, to reopen plants and offices.”

The company is also one of the largest employers in Ukraine, with over 30,000 members of staff, although this is a drop compared to 2021 when the figure was 34,000. But as expansion continues, Klymov believes this number will increase and Nova Post will also provide jobs to unemployed citizens who have suffered due to the war.

Seeing an opportunity last year to expand into the EU market, Nova Post opened 58 branches in countries with large Ukrainian populations, allowing employees who moved abroad to continue working for the company. Poland was the obvious first choice with 32 branches opening since October 2022. The company also expanded into Moldova (19 branches), Lithuania (two), Czechia (two), Romania (one) and most recently Germany with a second branch planned for July 17.

“Now Nova Post is an international express delivery network for Ukrainians all around the world. We could deliver from the USA or from China, so let's say it's the DHL or FedEx of Ukrainians,” the businessman says, claiming Nova Post can retain a significant presence and beat off foreign competitors, even when some refugees return to their homeland after the war.

Currently, discussions are underway to open in more countries, with sites in Hungary and Slovakia. The company also launched an airline service in May, Supernova Airlines, which carries out deliveries twice a week from Riga International Airport to Polish Rzeszow in cooperation with Latvian airline RAF-Avia. Between May 16 and June 30, Supernova transported 70,493kg, equating to 249,617 parcels, and there are plans to open new airports by the end of the year, including flights to the USA.

For now, the main source of investment comes from Nova Post’s own profit, without any foreign investment. But Klymov hopes this could change in the future when money starts pouring into Ukraine.

“I am absolutely sure that Ukrainian businesses will be very big targets for Western investment funds and big investors. It could be very interesting because I expect very big growth in the Ukrainian economy,” he states.

But the company still has to overcome major hurdles, particularly damages to logistics infrastructure and mines that litter Ukraine’s lands and waters, as well as the ongoing war. Every month, Nova Post allocates $2mn to the Armed Forces of Ukraine and the company issued underwater demining robots to clear explosives in the rivers and sea.

Moreover, with UAH7.1bn ($192.4mn) provided to the state budget last year, the company is one of Ukraine’s largest taxpayers, financially aiding the country and helping to rebuild roads and bridges in the liberated territories. Nova Post paid 10% more tax in 2022 than the previous year and the 2023 forecast is even higher, with UAH5.1bn paid in the first six months, 73% more than last year.

“Our key secret in this story was the decision to fight and try to work,” Klymov stresses.