PostNL trims profit outlook as weak parcel volumes hit Q3
Reuters
Published Nov 06, 2023 11:05
By Augustin Turpin and Olivier Cherfan
(Reuters) - Dutch postal firm PostNL expects annual operating profit at the low end of its forecast range, it said on Monday, after weakness in parcel volumes hit third-quarter earnings, sending its shares down more than 11%.
The results, which kicked off earnings reporting for European postal and delivery companies, underline industry-wide concerns as delivery platforms juggle with inflation, economic uncertainty and a post-pandemic decline in online shopping.
Belgian rival Bpost, Poland's InPost and DHL-owner Deutsche Post (ETR:DHLn) will report quarterly earnings later this week. Their shares were down around 1% at 1023 GMT.
PostNL said it delivered 81 million parcels in the third quarter, up 1.6% from a year earlier but below the 7% increase expected by analysts.
The group, which delivers parcels and letters across Belgium, the Netherlands and Luxembourg, said it expected the holiday season and November's parliamentary election in the Netherlands to boost mail and parcel volumes.
"Our biggest clients (are) indicating that they expect to do a bit more volume in the fourth quarter and this year ... which means that we've ramped up our capacity," finance chief Pim Berendsen told reporters.
PostNL expects to deliver 18 million election-related items this month and roughly 2 million parcels a day during the peak season, he added.
The company reported a normalised operating loss of 11 million euros ($11.8 million) for the third quarter, while analysts had forecast a profit of 3 million.
PostNL said efforts to mitigate a hit from inflation during the quarter had not been enough to offset an increase in organic costs, and warned of further cost pressures to come.
It sees 2023 operating earnings at the lower end of its outlook range of 100-130 million euros, while still guiding for a low single-digit increase in volumes.
The volume outlook implies growth of at least 4% in the fourth quarter, which "seems rather ambitious given the weakening macro environment and weak consumer confidence", ING analyst Marc Zwartsenburg said in a note to investors.
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Written By: Reuters
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